BoJ’s Noguchi: Will gradually adjust the degree of monetary accommodation if ...

Bank of Japan (BoJ) board member Asahi Noguchi said on Thursday, “if economic activity and prices develop in line with the bank's outlook, the bank will gradually adjust the degree of monetary accommodation.”

Additional quotes

What is needed for inflation to be sufficiently sustainable and stable is steady expansion in demand and an accompanying sustained increase in nominal wages.

Although growth in the CPI will likely decline overall, I believe that a chain reaction of price hikes could occur in certain areas, as has happened with food, including rice.

Once tightness in supply and demand conditions begins to generate upward momentum, it is not rare at all for prices to continue rising as firms compensate for previous delays in passing on costs.

Whether or not underlying inflation will continue to rise steadily toward 2% target will depend entirely on whether the momentum of wage increases is sustained, spreads to small and medium-sized firms and regional economies.

Impact from US tariffs limited so far.

If price target achieved in 2nd half of projected period of outlook report, BoJ should adjust rate at appropriate pace to align with that tlimeline.

That means raising policy interest rate at a pace that will make it possible to smoothly reach the neutral interest rate when 2% inflation target is achieved.