By Leika Kihara
TOKYO (Reuters) – Bank of Japan board member Asahi Noguchi said on Thursday the central bank must maintain ultra-easy monetary policy, even as rising commodity costs are expected to accelerate inflation toward its elusive 2% target.
The Ukraine crisis has pushed up raw material prices, though companies have struggled to pass on the higher cost to consumers due to weak household spending, Noguchi said.
While Japan’s core consumer inflation may exceed 2% from April on rising energy costs and the dissipating effect of past cellphone fee cuts, the increase is clearly driven by external factors rather than a recovery in domestic demand, he added.
“Japan is not experiencing the kind of high inflation seen in many other countries,” Noguchi told a speech, adding that policymakers must continue to focus on ending deflation rather than curbing inflation.
“In a country still mired in a sticky deflationary mindset, it will take significant time to stably achieve our 2% inflation target and justify a withdrawal of stimulus,” he said.
Noguchi’s views echo those of BOJ Governor Haruhiko Kuroda, who has stressed the bank’s resolve to keep monetary policy ultra-loose even as other major central banks eye an exit from crisis-mode stimulus measures.
(Reporting by Leika Kihara; Editing by Jacqueline Wong)
