MNI BRIEF: Watch Trade Off on Policy Changes - BOJ Noguchi

Asahi Noguchi, Bank of Japan board member, said Thursday the BOJ should consider the trade-off between easy-policy effects and restoring market function when changing the range of the long-term policy interest rate.

Noguchi, a dovish board member, maintained a cautious price view, saying the possibility is high that the y/y rise in core CPI will fall below 2% after temporary cost-push factors wane. “The BOJ must carefully ascertain whether the norm [prices and wages do not rise and inflation remains low] will change or not for the time being,” Noguchi told business leaders in Naha City.

Noguchi also said that the forward guidance for the policy rates showed a strong commitment to continue patiently with easy policy to achieve the 2% price target in a stable and sustainable manner. He added the BOJ must strengthen the momentum for wage hikes and achieve sustainable wage increases.