破局-2023发展与展望

Bank of Japan must respond to increasingly sticky inflation

Accommodative monetary policy stance no longer makes sense
The BoJ’s dovishness last year contributed to a rapid weakening of the yen that required intervention in the foreign exchange markets
The writer is chief Japan economist at JPMorgan in Tokyo

When will the Bank of Japan shift its monetary stance to reflect the reality of increasingly sticky inflation? Predicting policy remains difficult but the central bank’s interpretation of economic change remains as significant as the data itself.

Recent wage and inflation data already justify some scaling back of the current super-accommodative monetary stance. The BoJ will probably revise its inflation forecasts upwards in its outlook report due on July 28, indicating that it expects inflation will remain higher than initially thought. 

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