TOKYO: The Bank of Japan (BoJ) hopes to maintain its 2% inflation target even if climate change causes long-term shocks to future price developments, says governor Kazuo Ueda.
But Ueda said the BoJ will “monitor carefully” how the economic impact of climate change, as well as the fallout from government measures to promote the green transition, could affect inflation expectations.
“We would like to keep the inflation target at the current level”, even if climate change shocks occur, Ueda said at a conference in Basel, monitored via live YouTube feed.
“But I of course worry what it will do to inflation expectations.”
Japan will likely introduce a carbon tax sometime in the future, which could affect inflation expectations, Ueda said at the conference, held to discuss the impact of climate change on the economy and monetary policy. — Reuters
