Japan's economic growth is slowing because of costlier oil and raw materials and Bank of Japan policy will remain flexible, BOJ Gov. Masaaki Shirakawa said Thursday.
Rising commodity prices "would mean a drag on corporate profits and a decline in households' purchasing power," Shirakawa said at an Upper House committee session. "(The BOJ) needs to carefully monitor" whether eroding incomes will hurt business investment and consumption, he added.
The BOJ this week kept the overnight lending rate at 0.5 percent at its Policy Board meeting after slashing its growth estimate and shelving a two-year policy of seeking higher borrowing costs. Only two of 31 economists who gave predictions through December said the central bank will raise rates this year,