BoJ Nakagawa sees positive developments, but loose monetary policy still needed

BoJ Board member Junko Nakagawa struck a cautiously optimistic tone today about the Japanese economy, citing “positive developments” and “signs of change in corporate price and wage-setting behavior.”

However, she was quick to note that the country has not yet achieved its price target “in a stable, sustainable fashion.”

Nakagawa noted that there are chances inflation could accelerate beyond initial expectations. However, she also warned of the potential for inflation to decelerate once the pass-through effects of higher costs begin to moderate.

The policymaker underscored the need for BoJ to maintain its ultra-loose monetary policy for the time being, citing the prevailing economic uncertainty.