By Leika Kihara
TOKYO (Reuters) – Bank of Japan Governor Kazuo Ueda said on Wednesday the central bank’s response to cost-push inflation will depend on the state of the economy.
“In general, dealing with cost-push inflation is very difficult for central banks. On the one hand, you want to suppress inflation. On the other hand, you don’t want to tighten monetary policy, knowing that A little Ueda told parliament that cost-push inflation would cool the economy.
he said.
Ueda added that with imported raw material prices likely to have peaked, Japan Will see cost-push inflation subside.
The comments underscore the challenge for global central banks as they struggle to keep inflation in check despite a series of rate hikes that have slowed growth.
The BoJ remains a dovish exception in its focus on supporting the economy, arguing that the recent rise in inflation was largely driven by higher import costs and therefore unsustainable.
But markets generally Speculation that inflation and wage growth, along with the rising cost of prolonged easing, will prompt the Bank of Japan to gradually phase out its monetary policy’s controversial bond yield control policy soon.
Ueda’s comments contrast with those of his predecessor Haruhiko Kuroda, who has repeatedly disregarded the opportunistic policy of using monetary policy to counter cost-push inflation.
They also started Friday’s Japan The announcement comes ahead of the central bank’s two-day policy meeting, where it is widely expected to maintain ultra-loose monetary policy.
