MNI BRIEF: Japan Inflation To Slow From Feb: BOJ Kuroda
Japan needs ongoing easy policy to achieve sustainable 2% inflation, BOJ Governor Kuroda tells Davos panel.
Japan's inflation rate is set to decline from February, Bank of Japan Governor Haruhiko Kuroda said Friday, although he acknowledged that the target sustainable 2% rate will be met. Speaking at the World Economic Forum in Davos, Kuroda said inflation hit 4% in December, a 40-year high, but the higher prices were still being driven mainly by increased import costs.
Kuroda said the December decision to widen the tolerated trading band for 10-year JGB yields to +/-50 basis points either said of the 0% target was correct and the central bank would need to continue with exceptionally accommodative policy for now.
He noted Japan's economy continues to recover from the pandemic, growing 2% in 2022 -- a level likely to be replicated in 2023 -- both significantly above the potential growth rate of 1%. That, he said, would help push wages higher and be a further step towards achieving the sustainable 2% inflation target (MNI POLICY: BOJ To Tweak Guidance If Covid Severity Downgraded)