The Bank of Japan will maintain an ultralow rate policy amid heightened uncertainty over the global economy caused by policy tightening in other economies, while keeping close tabs on the financial market impact of rate hikes overseas, Gov. Haruhiko Kuroda said Monday.
In a speech to business leaders in the central city of Nagoya, Kuroda stuck to the view that a recent pickup in inflation, driven mainly by higher commodity prices and a weaker yen, will not be sustained, even as the nation has seen a broadening of price hikes by companies.
The central bank said its 2% inflation target should be attained in a stable and sustainable fashion supported by robust wage growth. Despite the headline inflation figure in Japan topping that threshold in recent months, Kuroda has ruled out the possibility of a near-term interest rate hike because inflationary pressure is expected to ease.