Bank of Japan officials see little need to rush into scrapping the world’s last negative interest rate this month, as they have yet to see enough evidence of wage growth that would support sustainable inflation, according to people familiar with the matter.
That’s an indication the central bank is likely to keep its monetary stimulus settings unchanged at a two-day policy meeting ending Dec. 19, despite recent market speculation that the negative rate may be scrapped as soon as the December meeting. BOJ officials view the potential cost of waiting for more information to confirm solid wage growth as not very high, the people said.
The yen extended losses to 1% in afternoon trading after the news, to around the ¥146.46 per dollar level. It had been down about 0.7% earlier, amid market debate that last week’s rally had gone too far. Nikkei futures extended gains.