BOJ's Sato: Believes it's Unnecessary to Persist in Hitting 2 Pct Inflation Target at All Costs

BOJ's Sato: Believes it's Unnecessary to Persist in Hitting 2 Pct Inflation Target at All Costs

Bank of Japan policy board member Takehiro Sato is crossing the wires, speaking at a meeting with business leaders, noting that believes it's unnecessary to persist in hitting 2 pct inflation target at all costs.

Headlines

Japan economy likely to avert recession

Global economic slowdown likely to continue for time being

Companies have been cautious on capex, this trend may strengthen due to global market developments

Negative rate policy may have dampened household sentiment

QQE was 'shock' therapy, personally did not expect it to last for too long

Negative rate policy may have monetary tightening, not easing effect on economy

BOJ must take balanced approach in achieving its mandate of price stability and financial stability, but negative rate policy may hurt that balance

BOJ must modify its current framework to one that is more suitable for long-term battle vs deflation

Desirable to aim to achieve price target as a medium to long term goal\

Expect road towards achieving 2% inflation target will be long

Excessive interest rate declines could undermine people's confidence via negative effects on corporate finance

Sceptical of idea that negative rate policy will stimulate capex

Opinions divided on economic effects of negative rate policy, which is fuelling worries among people over this policy

Believe it's unnecessary to persist in hitting 2 pct inflation target at all costs

People aren't hoping for inflation that is not accompanied by income growth

We have learned from experience that if inflation rises before income does, consumer sentiment worsens and hurts consumption