Japan’s Underlying Inflation Approaching 2 Pct: BOJ’s Ueda

Tokyo, Sept. 19 (Jiji Press)–Bank of Japan Governor Kazuo Ueda said Friday that the country’s underlying inflation is approaching the central bank’s target of 2 pct. “Underlying inflation is still slightly below (the target) and in the process of approaching 2 pct,” Ueda said at a press conference following the BOJ’s two-day policy-setting meeting that ended earlier in the day. At the Policy Board meeting, the BOJ decided to sell its holdings of exchange-traded funds, or ETFs, and Japanese real estate investment trusts, or J-REITs, to the market, while holding interest rates steady. Once preparations are completed, the BOJ will likely start selling the ETFs and J-REITs early next year at the earliest. Ueda said it will take more than 100 years for the central bank to sell off the ETFs and J-REITs it bought as part of its large-scale monetary easing policy. He defended the past ETF and J-REIT purchases as “necessary.” He emphasized the importance of selling off the ETFs and J-REITs “bit by bit” in order to avoid destabilizing the market as much as possible. Regarding U.S. President Donald Trump’s high tariffs, the BOJ chief said that the Japanese economy is “withstanding” the downward pressure from the levies. As the impact of the U.S. tariff policy may surface in the future, the BOJ is wary of the downside risks to both the Japanese economy and prices, he added. Ueda reiterated that the central bank will “raise its policy rate accordingly” if there is increasing clarity that its economic and price outlooks will materialize. At the same time, however, he showed the BOJ’s stance of carefully exploring the timing of implementing additional rate hikes, saying, “We’re at a stage where we want to further assess data amid heightened uncertainties.” END [Copyright The Jiji Press, Ltd.]