(Reuters) – Bank of Japan (BOJ) Deputy Governor Masazumi Wakatabe said the central bank must remain vigilant against the potential dangers of secular stagnation and low inflation as price increases driven by cost drivers will not last for long on Monday .
Japan’s economy has long been in deflation, but sustainable monetary easing has “certainly had a positive impact on the real economy,” Wakatabe said, defending the Bank of Japan’s long-term ultra-loose monetary policy.
“The mild inflation regime is not over, and we should say that the potential dangers of secular stagnation and Japanification are not over,” he said in a speech at Columbia University in New York.
“Japanification” is a concept used in academia to refer to Japan going through secular stagnation with deflation or low inflation from later period1990s To early 2000s.
While inflation has accelerated recently Wakatabe said that globally, many of the factors driving up prices are driven by higher costs , such as the Ukrainian War.
New price system. Adjusted, rising inflation is likely to return to steady-state inflation,” he said.
impacted. Of course, cost drivers are likely to remain , but it is uncertain whether they will push up the steady-state inflation rate,” Wakatabe said, adding that “it is well known that cost-push inflation does not last long.” Known as a supporter of monetary easing. His five-year term as deputy governor of the Bank of Japan ends in March.