TOKYO - Bank of Japan (BOJ) Governor Haruhiko Kuroda on Monday brushed aside the chance of a near-term exit from ultra-loose monetary policy but voiced hope that intensifying labour shortages will prod firms to raise wages.
Kuroda said the BOJ's decision last week to widen the allowance band around its yield target was aimed at enhancing the effect of its ultra-easy policy, rather than a first step toward withdrawing its massive stimulus programme.
"This is definitely not a step toward an exit. The Bank will aim to achieve the price target in a sustainable and stable manner, accompanied by wage increases, by continuing with monetary easing under yield curve control," Kuroda said in a speech delivered to a meeting of business lobby Keidanren.
He also said Japan's average consumer inflation will likely slow below the BOJ's 2 per cent target in the next fiscal year as the effects of soaring import costs dissipate.
But Kuroda said wage growth will likely increase gradually due to intensifying labour shortages and structural changes in Japan's job market, which are leading to higher pay for temporary workers and a rise in the number of permanent workers. ...continue reading
