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MNI BRIEF: Easy Policy Needed To Achieve Aims - BOJ Nakagawa

(MNI) Tokyo

BOJ board member says central bank must continue with current policy to achieve sustainable price hikes and wage growth.

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The Bank of Japan must maintain its current easy policy to achieve sustainable price rises accompanied with wage hikes, board member Junko Nakagawa said on Wednesday. Japan’s current headline CPI, 2.6% y/y in July, is largely on the back of higher resource prices and the weak yen, Nakagawa told business leaders in Hakodate City. (See MNI INTERVIEW2: Kuroda’s BOJ To Hold To Policy Stance - Kameda)

She accepted that CPI had stayed above a 2% price target but didn't think it good "to simply achieve the 2% price target.” The BOJ is still looking to boost corporate profits and the improving labor market situation with its easy policy, forming a virtuous cycle that sees both wages and prices rise in a sustainable manner, Nakagawa said,.

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The Bank of Japan must maintain its current easy policy to achieve sustainable price rises accompanied with wage hikes, board member Junko Nakagawa said on Wednesday. Japan’s current headline CPI, 2.6% y/y in July, is largely on the back of higher resource prices and the weak yen, Nakagawa told business leaders in Hakodate City. (See MNI INTERVIEW2: Kuroda’s BOJ To Hold To Policy Stance - Kameda)

She accepted that CPI had stayed above a 2% price target but didn't think it good "to simply achieve the 2% price target.” The BOJ is still looking to boost corporate profits and the improving labor market situation with its easy policy, forming a virtuous cycle that sees both wages and prices rise in a sustainable manner, Nakagawa said,.

Keep reading...Show less