Households having difficulty understanding what the Bank of Japan is trying to communicate rose to their highest level in almost four years, a survey by the central bank shows.
Some 61.9 percent of households said they were unclear on what message the BOJ was trying to send to the general public, according to a quarterly survey released Wednesday in Tokyo. The figure was the highest since September 2008. Respondents in the survey, conducted from May 10 to June 5, weren’t asked to elaborate on what aspects they found hard to understand.
The finding is an indication of the BOJ’s failure to clearly communicate its policies since Gov. Masaaki Shirakawa and his Policy Board unveiled a 1 percent inflation goal in February to enhance transparency, economist Hideo Kumano said.
Households have been mired in more than a decade of deflation and need a clearer explanation of how monetary policy can help reverse that trend, he said.
“The BOJ has failed to improve its communication with the market and households,” said Kumano, chief economist at Dai-ichi Life Research Institute and an ex-BOJ official. “The bank has to do more to make ordinary people understand what it is doing.”
For example, the BOJ confused investors by removing its commitment to “powerful monetary easing” from a May policy statement and reinstating it in June with no explanation, he said.
When the BOJ unveiled a ¥10 trillion expansion in purchases of Japanese government bonds on April 27, the impact was diminished because the BOJ predicted it would soon achieve its inflation goal, Credit Suisse economist Hiromichi Shirakawa said.