BoJ says no tightening as oil stirs inflation in Japan

BoJ says no tightening as oil stirs inflation in Japan

TOKYO: Japan’s central bank chief said on Friday the country will likely reach its key two-percent inflation target as oil rates surge, but the bank will continue monetary easing policies because the price rises are caused by external factors. The Bank of Japan has struggled to lift inflation for nearly a decade with the world’s third-largest economy swinging between periods of sluggish inflation and deflation, both considered bad for growth.

“Unlike in the US and Europe, inflation is currently at around 0.6 percent, and is likely to rise to about two percent after April,” BoJ governor Haruhiko Kuroda told reporters following a two-day policy meeting. “Most of the rise in prices will be caused by increases in international commodity supplies, energy, and food import prices, so naturally it is not necessary or appropriate to tighten monetary policy.”

The United States Federal Reserve raised its benchmark interest rate on Wednesday for the first time since 2018 in a bid to tackle soaring inflation. Kuroda said consumption in Japan is expected to further recover from a pandemic dip as the government lifts restrictions-which mainly require restaurants and bars to limit opening hours-in Tokyo and elsewhere on Monday. Japan’s core consumer prices, which exclude volatile fresh