MNI BRIEF: BOJ's Joint Statement With Govt 'Effective' -Kuroda

Bank of Japan Governor Haruhiko Kuroda indicated on Monday that he sees no need to review the joint statement between the BOJ and the government made in January 2013, saying the statement on policy coordination is effective in achieving price stability target.

Kuroda told reporters that the BOJ continues to keep easy policy to achieve the 2% price target and the government conducts fiscal policy in a flexible manner.

In 2013, the BOJ and the government agreed to strengthen their policy coordination in order to overcome deflation and achieve sustainable economic growth.

The statement said, “In order to overcome deflation early and achieve sustainable economic growth with price stability, the Government and the Bank of Japan will strengthen their policy coordination and work together as follows.” (See MNI BRIEF: BOJ's Kuroda Says CPI To Slow After Rising Above 3%).

Kuroda and his colleagues have called on firms to deliver reasonable wage hikes but he said it wasn't appropriate for the BOJ to refer to any numerical figures with regard to wage hikes. He said that the BOJ is aiming at achieving price stability target in a stable and sustainable manner accompanied with wage hikes.

The BOJ is paying attention to wage hikes and to drivers of wage hikes, such as how strongly the labor market conditions tighten.

As for forex moves, Kuroda said that he was skeptical about a continuous rise of the dollar given the likely slowing in U.S. economy next year caused by rapid and large rate hikes to tame stubborn inflation rates.(See MNI BRIEF: BOJ's Kuroda Says Rapid Forex Moves Undesirable)

“It is unlikely that the dollar continues to rise from now on and forever,” he said.

He added that foreign exchange rates should move stably, reflecting economic and financial fundamentals. “The recent yen moves are one-sided and rapid and undesirable,” Kuroda said.