MNI BRIEF: Time Needed To Change Easy Policy - BOJ's Nakamura

Bank of Japan board member Toyoaki Nakamura said on Thursday that the BOJ must continue with its easy policy as the economy has not reached the stage of achieving the 2% price target in a stable and sustainable manner.

Nakamura told business leaders in Gifu City that the current price rises were mainly caused by pass-through of cost increases led by the rise in import prices and they did not involve wage hikes. Nakamura also pointed out two risk factors for the Japanese economy, such as sustainable wage hikes including smaller firms, and developments in overseas economies, which have big impact on Japan’s exports and production.

Nakamura was in favour of conducting yield curve control with greater flexibility enacted at the July meeting, but he dissented, saying it was more desirable to allow greater flexibility after confirming a rise in company earning power, particularly those of smaller firms.