Analysis:Japan's upbeat wages may keep new BOJ chief on hook for policy tweak
TOKYO : Japan's new central bank governor Kazuo Ueda says he is in no rush to shift away from the radical monetary stimulus of his predecessor, but wage pressures may force him to make the policy tweaks faster than he'd like.
However, a widely expected upgrade in the Bank of Japan's price forecasts due this month may show inflation staying near 2 per cent for several years. "The BOJ will probably upgrade its price forecasts this month. In doing so, it could offer new guidance on future policy and tweak YCC around summer or autumn," she said.In his confirmation hearing to parliament in February and Monday's inaugural news conference, Ueda vowed to sustain Kuroda's massive stimulus programme including YCC, which tempered market bets of an immediate policy shift.
Ueda may need to find a new reason to keep ultra-loose policy if the BOJ's fresh quarterly forecasts, due at his debut meeting on April 27-28, show inflation hovering around 2 per cent in the next three years. With more firms hiking prices and employees' pay, the BOJ may revise up the forecasts and see inflation stay around 2 per cent through fiscal 2025, analysts say.
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