MNI BRIEF: BOJ's Kuroda Says Keeping Easy Policy Appropriate

Bank of Japan Governor Haruhiko Kuroda said on Monday that Japan’s core consumer price index will fall below a 2% year-on-year pace in fiscal 2023 and it’s appropriate for the bank to maintain easy policy to achieve its price stability target accompanied by wage hikes.

Kuroda told lawmakers at a Lower House budget committee that the year-on-year rise in core CPI will likely accelerate toward the end of this year due to rising import prices caused by high resource prices and the weak yen.

“However, the year-on-year rise of core CPI will fall below 2% in fiscal 2023. Japan’s economy is in a process of recovering from Covid-19. Income outflow (caused by high import prices) will put downward pressure on the economy,” Kuroda said.

Prime Minister Fumio Kishida, who was at the same panel, said he will select a new BOJ governor in April when Kuroda’s term ends, while monitoring economic and financial conditions.

“It is important for the new governor to show the foresight for monetary policy and to cooperate closely with the government,” Kishida said without elaborating.