The Bank of Japan board member on Wednesday called for maintaining ultra-easy policy in bid to enable time to determine whether the recent rise in inflation will be accompanied by rising wages.
Former commercial banker Naoki Tamura has been outspoken about his belief that the central bank needs to assess the advantages and disadvantages of its current ultra-loose monetary policy at some point.
Since services prices have been on the rise and more businesses are passing on the cost of rising raw materials to consumers, he also expressed concern that Japan’s inflation could end up being higher than expected.
But currently, he added in a speech, Japan is experiencing a “rare” situation in which pent-up demand is backing the economy despite growing import costs pushing up inflation due to the Covid-19 outbreak.
The comments were made as the market anticipated the BOJ to end its yield curve control (YCC) policy and begin raising interest rates in April, after the term of dovish Governor Haruhiko Kuroda ends.