Bank of Japan Governor Kazuo Ueda on Saturday said inflation remains lower than the central bank’s goal, explaining why officials are continuing with their current monetary-policy strategy.
“We think underlying inflation is still a bit below our target of 2%,” Ueda said Saturday during a panel discussion at the Federal Reserve’s annual symposium in Jackson Hole, Wyoming, Bloomberg reported. “This is why we are sticking with our current monetary easing framework.”
Japanese annual inflation, as measured by consumer prices excluding fresh food, registered 3.1% in July and the rate “is expected to decline toward the end of the year,” Ueda said.
“We think domestic demand is still on a healthy trend, although that’s something that needs to be checked” in third-quarter data, Ueda said.
Ueda didn’t comment on foreign exchange rates during his address, which was part of a panel on globalization.
Toward the end of a roughly 20-minute talk, Ueda also called China’s recent economic slowdown a “disappointment,” with July data “on the weak side.”
“The underlying problem appears to be the adjustment in the property sector and the spillover to the rest of the economy,” Ueda said of China.
The BOJ loosened a grip on its yield curve control program last month in Ueda’s first surprise move.
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