MNI BRIEF: BOJ's 2% Target Far,  Easing Needed - Takata

Bank of Japan Board Member Hajime Takata said on Wednesday that the BOJ must continue patiently with easy policy as the economy remains far from achieving the Bank's 2% inflation target in a sustainable and stable manner.

The performance of overseas economies also poses a downside risk, Takata told business leaders in Shimonoseki City. “If overseas economies decelerate sharply as a result of the rate hikes in the U.S. and Eurozone, downward pressure on Japan’s economy will strengthen,” he added.

Takata, however, said the BOJ had observed nascent developments toward achieving the 2% price target, such as a shift in wage and price trends, which are close to a turning point. “Looking ahead, the focus is for Japan to realise sustainable wage hikes corresponding to the improvement of corporate profits and price rises,” Takata said.

He added that it is necessary for the BOJ to conduct flexible policy action and prepare for uncertainties based on economic and price conditions.