HIROSHIMA, Japan – The Bank of Japan does not need to ramp up monetary stimulus for now as a moderate recovery is expected later in the year but should be ready to loosen policy further if external pressure on the economy intensifies, board member Yukitoshi Funo said on Wednesday.
Funo said Japan’s economy was moving in line with the central bank’s projection but risks, such as U.S.-China trade tensions, could disrupt the path toward achieving the central bank’s 2% inflation target.
“We can expect Japan’s economy to recover in the latter half of this year. As such, I see no need to ease policy further now,” Funo told a news conference after meeting with business leaders in Hiroshima, western Japan.
“But we must act without hesitation if changes in overseas and domestic economic conditions hurt Japan’s price momentum or the current favorable job market.”
The comments were the most direct signal to date by a BOJ policymaker that the central bank was in no rush to expand stimulus as long as the economy sustains a moderate recovery.
Prime Minister Shinzo Abe praised the BOJ’s massive stimulus for creating jobs and pulling Japan out of deflation.
“The BOJ’s policies weren’t mistaken,” Abe said. “I hope the BOJ continues to guide policy with an eye on achieving 2% inflation,” he said on Wednesday in a debate with opposition party leaders in Tokyo. He added that the BOJ shouldn’t persist in meeting its target at all cost.
A former auto executive, Funo has consistently voted with the majority of the nine-member board.
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