TOKYO: Bank of Japan Governor Toshihiko Fukui said yesterday that the central bank remains committed to its policy of “quantitative easing” until deflation ends.
Fukui also said Japan's economy was in the process of “settling into self-sustained growth”.
“The Bank of Japan should keep its current policy stance, that is quantitative easing ... until CPI (the consumer price index) comes above 0% year-on-year,” he said in a speech in Tokyo.
He added that it was a commitment to markets, the general public and the international community.
The BOJ has vowed to maintain quantitative easing until year-on-year changes in CPI stabilise at or above 0%.
Under the policy, which has pinned short-term interest rates near zero, the central bank floods the money market with far more funds than it needs in an attempt to spur lending and thus encourage economic growth.
Fukui has said the recent rise in oil prices was filtering through to wholesale and consumer prices, but it would not be enough to immediately reverse five years of deflation because of structural factors such as higher productivity and wage cuts. – Reuters