BOJ’s 2 Pct Inflation Target Not Yet Met for Certain: Himino

Tokyo, March 2 (Jiji Press)–Japan’s inflation rate cannot yet be said to have certainly reached the Bank of Japan’s 2 pct target, Ryozo Himino, deputy governor of the central bank, said Monday. “While one might broadly assess that it is already close to 2 pct, I feel that asserting that the rate has reached 2 pct for certain may still be premature,” Himino said of the country’s underlying inflation in a speech in the western Japanese city of Wakayama. He said that the BOJ’s interest rate hikes, including the most recent increase to 0.75 pct last December, have had a limited impact for now, and that “financial conditions are still accommodative.” It is difficult to say for certain whether the December increase was premature, overdue or perfectly timed, and when the next rate hike should come, Himino said. “Reacting to every fluctuation in the market could lead to the bank being second-guessed by speculators,” he said of the BOJ’s monetary policy and its impact on markets. “Rather, the bank should make it a priority to gain confidence of market participants that it is duly conducting monetary policy in line with developments in economic activity and prices,” he said. Himino said the BOJ will closely monitor the situation in the Middle East, where tensions have been intensifying following U.S. and Israeli military strikes on Iran over the weekend. END [Copyright The Jiji Press, Ltd.]