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MNI BRIEF: BOJ To Keep Easy Policy Amid 'Temporary' Price Gain

TOKYO (MNI)

The Bank of Japan will stick to easy policy if consumer prices rise above 2% in or after April if the gains are seen as temporary and not accompanied by higher wages, MNI understands.

Bank officials expect upward pressure on the CPI from high crude oil prices to slow eventually, though high uncertainties continue. In the meantime, continued easy policy is seen as needed to offset a weaker economy that would make it harder to reach the goal of a 2% sustained rise in prices driven by economic recovery and higher wages, see: MNI INSIGHT: Few BOJ Tools As Weak Yen Drives 'Bad' Prices Up.

Bank officials note government efforts such as subsidies for petrol prices and other support that can cushion the current impact and set the stage for a rebound based on pent-up demand. The BOJ releases its latest policy views on Friday.

MNI Tokyo Bureau | +81 90-2175-0040 | hiroshi.inoue@marketnews.com
MNI Tokyo Bureau | +81 90-2175-0040 | hiroshi.inoue@marketnews.com

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