Kazuo Ueda, Governor of the Bank of Japan, declared on Thursday that corporations are taking more initiative than ever before to raise prices and wages. This is a sign that the nation is making progress towards achieving the BOJ’s two percent inflation target in a lasting manner.
The Governor mentioned in a parliamentary hearing that whether or not salary hikes will spread out and businesses will begin to raise their prices will be a major factor in determining if the inflation goal can be met sustainably. Ueda stated, “We anticipate that the trend of inflation will slowly move closer to two percent. However, we want to wait until we are more certain that our price objective can be met on a continuing basis.” He also added, “Until then, we will keep negative interest rates and the yield curve control framework in place.”
The Governor could not give a definitive answer as to which of the two policies would be ended first, as it would depend on the current economic and financial conditions.