MNI BRIEF: BOJ Wakatabe: Should Act If Econ Risks Materialise

Bank of Japan Deputy Governor Masazumi Wakatabe said on Wednesday that additional easing measures should be taken without hesitation if downside risks to the economy materialise.

"It is desirable to respond to them through measures other than monetary policy, which is aimed at managing aggregate demand,” Wakatabe told business leaders in Okayama City. "I think that it is necessary to constantly reexamine, without any preconception, whether the current situation can be explained and analyzed with the current theory of monetary policy,” (See MNI INSIGHT:BOJ To Keep Range Unless Around-Zero Target Shifts).

Wakatabe also said prices of a broad range of items must rise to achieve the price stability target of 2% in a stable manner.

“If the individual prices of, for example, energy experience a significant rise, this may lead to a figure of 2% in the CPI. However, inflation driven by such individual price rises lacks sustainability,” Wakatabe said, adding "medium- to long-term inflation expectations in Japan are still low.”