Inflation & Prices
Japan Can’t Declare End of Deflation After BOJ Tweak, Amari Says
- YCC tweak doesn’t signal normalization as easing to persist
- Ueda needs to see 3% steady wage growth before mapping an exit
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Japan can’t yet declare it’s beaten deflation, and the central bank will therefore need to retain its ultraeasy monetary settings even after it loosened its grip on bond yields, according to a key lawmaker behind the nation’s decades-long quest to fight falling prices.
If nominal wage growth of 3% becomes a steady trend in tandem with a sustainable 2% pace of consumer inflation, the Bank of Japan can start mapping an exit from its current policy scheme, said Akira Amari, who was the economic revitalization minister when the central bank embarked on its aggressive easing campaign under former governor Haruhiko Kuroda.