BOJ policy makers saw a need for simple policies despite rising prices

© . FILE PHOTO: A man in a protective mask walks past the Bank of Japan headquarters amid the coronavirus (COVID-19) outbreak in Tokyo, Japan, May 22, 2020. REUTERS/Kim Kyung-Hoon By Leika Kihara TOKYO ( ) – Bank of Japan policymakers stressed the need to keep monetary policy ultra-easy, even as some of them saw signs of mounting inflationary pressures from the Ukraine crisis, a summary of opinions at their March meeting showed on Tuesday. . Japanese consumer inflation is set to accelerate markedly from April and may hover around 2% for some time, mainly due to the rise in energy prices, one member said. “As wholesale prices rise to historic levels, upward pressure on consumer inflation is gradually increasing,” said another member. However, other members warned that such cost inflation will be short-lived due to sluggish domestic demand, the summary found. “Consumer inflation could hover around 2% in the first half of fiscal 2022 due to rising commodity costs. But if commodity prices fall, it could fall below expectations in the second half of the year,” said one member. Most of the opinions called for the need for the BOJ to stick to an ultra-accommodative monetary policy, as the war in Ukraine heightened uncertainty about the global outlook. “Unlike the United States or Great Britain, Japan is not in a situation where inflation is constantly above 2%… It is therefore important to support the recovery of the economy from the coronavirus pandemic by increasing monetary easing. maintain,” said one member. At the March meeting, the BOJ maintained its strong stimulus and warned of mounting risks to a fragile economic recovery from the crisis in Ukraine. Japanese core consumer inflation reached 0.6% in February, well below the BOJ’s 2% target, as weak consumer spending discourages companies from raising prices. But analysts expect inflation to approach 2% from April, reflecting rising fuel costs and the fading effect of past cuts in cell phone rates.

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