Economics
Japan Wage-Targeting Proponent Says Low Inflation Supports Case
- Tokyo University's Watanabe sees chance of BOJ easing Friday
- Bond market's 10-year inflation expectations plunged to 0.52%
Matter of Time Before BOJ Makes Move?
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The former central banker who has been arguing the Bank of Japan should switch to targeting wage increases sees little evidence current policies are working in the economy or the bond market.
Without higher salaries, the 2 percent rise in consumer prices sought by the BOJ isn’t sustainable, and if people don’t expect inflation will take hold, they won’t position for higher interest rates in the future, said Tsutomu Watanabe, who worked at the central bank from 1982 to 1999 and now teaches economics at the University of Tokyo. A measure of bond-market expectations for inflation in the coming decade plunged to 0.52 percent this month as 10-year sovereign yields dropped to a record.