The Bank of Japan intends to continue ultra-soft policy

The Bank of Japan announced that it intends to continue to adhere to an ultra-soft monetary policy, since inflation in the country remains relatively low. Central Bank Governor Haruhiko Kuroda stressed that the Japanese economy is less affected by inflation than other countries in the world, and the 15-year experience of deflation constrains earnings growth.

Core inflation in Japan in May has been at 2.1% for the second month in a row. The increase in prices is mainly due to the rise in price of energy carriers.

Kuroda also noted that consumer price growth may be at the level of about 2% for about a year, and in the next fiscal year, which will begin in April 2023, inflation will begin to slow down.

«Unlike other economies in the world, Japan is not so much affected by the global inflationary trend, so monetary policy will remain soft,» the head of the regulator said.

As you know, at the end of 2013, a 15-year period of deflation ended in Japan, after which Japanese companies were in no hurry to raise prices and wages. At the same time, there is a noticeable shortage of supply in the labor market, but there is no strong growth in wages, as well as a strong increase in prices.