MNI BRIEF: BOJ's Tamura Calls For Review Of Policy Framework

Bank of Japan board member Naoki Tamura said the BOJ should review its policy framework and price stability target at an appropriate time, the Asashi Shimbun reported on Friday.

Tamura, who took office in July, told Japan's leading newspaper that the BOJ currently needs to maintain its easy policy and examine whether a virtuous cycle of rising prices and wages emerges.

He called for greater flexibility around the Bank's 2% price target. “If the economic virtuous cycle is realized, for example, 1.8% CPI is fine. (The BOJ) should consider the price target in a flexible manner,” he said.

With regard to the timing of a policy framework review, Tamura said it would depend on developments in the economy, wages and prices. He added that there is no denying that the prolonged easy policy had restricted market functioning.

Central banks such as the Reserve Bank of New Zealand and the Reserve Bank of Australia are undergoing reviews of their policymaking frameworks and inflation targets.