MNI BRIEF: Japanese CPI To Rebound After Mid-FY2023- Kuroda

Japanese inflation will rebound after the second half of this fiscal year following a fall below 2% in the first half thanks to cheaper imports and lower utility charges due to government subsidies, outgoing Bank of Japan Governor Haruhiko Kuroda told reporters on Friday.

The BOJ will update medium-term economic growth and inflation projections at its April 27-28 meeting, under new governor Kazuo Ueda. Minutes and summaries of previous meetings show some board members anticipated stronger-than-expected price moves driven by corporate price-setting and wages. (See MNI POLICY: BOJ Eyes Orders Amid Tighter Global Conditions)

The BOJ’s ultra-easy policy of recent years has been appropriate, Kuroda said, adding that while the 2% price target has not been achieved, Japan has escaped from years of deflation.

While norms for wage and price restraint have contained inflation, the BOJ has created an environment for these factors to change, said the 78-year-old, who said that he might now teach part time at university.

Former board member Ueda will hold a news conference when he takes office on Monday. In March confirmation hearings he said the BOJ should maintain easy policy but that side effects of yield curve control should be mitigated.