BOJ’s Noguchi: Central bank’s current monetary policy has been effective

Dhwani Mehta FXStreet

The Bank of Japan’s (BOJ) current monetary policy is much appreciated, as it pulled Japan out of a state of deflation, the central bank’s new board member said in a statement on Thursday.

Additional comments

It's very important to prepare options for in case the BOJ needs to ease policy.

Whether the BOJ uses easing options will be decision that will need to be made upon big economic shocks.

If necessary, the BOJ must act to achieve price stability, appropriate job market even if doing so involves side-effects.

Disinflation is something many economies face, not just Japan.

The BOJ’s current monetary policy has been effective but it is taking quite a long time for inflation to accelerate toward its target.

The BOJ must first deal with aftermath of COVID-19 with cooperation of government then proceed with steps to achieve inflation target.

Priority of monetary policy should be to bring economic growth, inflation, jobs to appropriate levels.

The BOJ must take steps to ease strain of its policy on financial institutions, but such strain will be removed once the BOJ achieves price stability.

Welcome BOJ’s recent decision to make its ETF buying more flexible as it increases future easing options.

No comment at this stage on the BOJ’s next desirable step.

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Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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