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Japan's central bank won't decide monetary policy on consumer prices alone

Japan's central bank won't decide monetary policy on consumer prices alone

The Bank of Japan won't set monetary policy based on consumer prices alone, a senior bank official said Thursday.
"Consumer prices are important data, but we will not determine monetary policy on that alone," said Bank of Japan Deputy Governor Toshiro Muto.
"We are closely watching developments of the economy and other movements," told reporters in Kyoto, western Japan, after meeting regional business leaders there.
Muto also said he does not have any preconceptions about when to raise the benchmark interest rate, now at 0.25 percent.
In July, the central bank ended its zero interest rate policy with the first rate hike since August 2000 amid signs that Japan's economy, stuck in the doldrums for more than a decade, was gaining strength.
With prices inching up after years of deflation, analysts have been speculating about when the Bank of Japan will next raise rates.
Japan's core consumer price index, which excludes volatile fresh food prices, rose 0.3 percent in August, the third monthly gain under a new, revised calculation method. Under the old system, it would have been the 10th consecutive monthly increase.
Earlier this week, new Finance Minister Koji Omi said that the overall trend for prices is improving and urged the government to declare an end to deflation in Japan, following a better-than-expected result from the BOJ's "tankan" quarterly business sentiment.


Updated : 2021-05-15 14:29 GMT+08:00