BOJ's Masu Warns Weak Yen Could Push Inflation Above 2%, Urges Ending Negative Real Rates
Updated
Updated · investinglive.com · May 14
BOJ's Masu Warns Weak Yen Could Push Inflation Above 2%, Urges Ending Negative Real Rates
1 articles · Updated · investinglive.com · May 14
Masu said yen-driven price gains could lift inflation expectations and push Japan’s underlying inflation above the BOJ’s 2% target, arguing policymakers must watch the pass-through closely.
Negative real rates should be addressed as soon as possible, he said, because Japan has clearly moved out of deflation and entered an inflationary phase.
He still defended the BOJ’s decision to hold rates in April, saying a hasty move was not warranted when policy is already nearing a neutral level and further assessment is needed.
Fuel-price spikes from war could prove temporary, but Masu warned higher distribution costs may feed into food prices and make the shock more persistent.
That energy shock could hit Japan harder than in the 1970s, underscoring the BOJ’s balancing act between patience on rates and preventing inflation from becoming entrenched.
With wages rising but costs soaring, is Japan trading its long deflationary winter for a stagflationary crisis?
The BOJ faces a 1970s-style energy shock. Is its decision to hold rates a sign of patience or a policy error?
Japan’s wages are finally growing after decades. So why are its people still getting poorer?