Bank of Japan Governor Kazuo Ueda recently addressed the issue of inflation and explained why the central bank is sticking to its current monetary-policy strategy. Speaking at the Federal Reserve’s annual symposium in Jackson Hole, Wyoming, Ueda stated that underlying inflation is still below the bank’s target of 2%. This is why they are continuing with their current monetary easing framework.
According to Ueda, Japanese annual inflation, excluding fresh food, reached 3.1% in July but is expected to decline towards the end of the year. He also mentioned that domestic demand is on a healthy trend, although third-quarter data needs to be examined to confirm this.
During his address on globalization, Ueda did not comment on foreign exchange rates. However, he did express disappointment in China’s recent economic slowdown, stating that July data was “on the weak side.” He attributed this slowdown to the adjustment in the property sector and its impact on the rest of the economy.
In a surprise move last month, the Bank of Japan loosened its grip on its yield curve control program under Ueda’s leadership.
