Bank of Japan Gov. Haruhiko Kuroda is unlikely to move toward normalization in the final months of his term, even if inflation hits 3%, though a prolonged spell at that level would eventually prompt change, according to economists surveyed by Bloomberg.
BOJ watchers have seen Japan’s key price measure come in above the central bank’s 2% target for four straight months and continue to pick up speed. But 16 of 19 analysts said that a further acceleration to 3%, the highest since 1991 excluding tax-hike years, wouldn’t increase the likelihood of policy change before Kuroda’s term ends in April.
That’s because economists say inflation needs to remain at 3% or more for at least half a year before a policy shift can happen. To fulfill that condition before Kuroda’s final policy meeting in early March, inflation would need to hit that level this month, and stay there through January.