Former Bank of Japan governor Haruhiko Kuroda don talk say di central bank suppose raise im policy interest rate reach “neutral rate” of around 1.5 percent from di current 0.75 percent wey dey ground. Kuroda, wey be 81 years old, talk dis one for inside interview with Kyodo News.
Di former BOJ chief wey serve for 10 years from 2013, say if di bank dey raise di rate with di usual pace of 0.25 percentage point, e fit still hike di rate three or four times. Kuroda be di person wey introduce “bazooka” stimulus during im time as governor, with strategy wey aim to end years of deflation for Japan.
Kazuo Ueda, di person wey take over from Kuroda as central bank governor, don already talk say di bank dey find to continue to raise rates to normalize monetary policy as long as prices and economic activity continue to align with expectations. Kuroda yarn say “There is nothing wrong at all” if di bank decide to do another rate hike for dia next policy meeting for April.
Di rise for consumer prices wey di weak yen and higher import costs cause, make BOJ for March 2024 raise di key rate for di first time for 17 years. Dem follow am with further hikes for July 2024 and for January and December last year. Kuroda reflect on im time as BOJ chief say bold monetary easing steps been “necessary to beat deflation and to achieve stable growth and full employment.”
Whether to shift policy to neutral stance, wey go neither stimulate nor cool di economy, na sensitive matter under di government of Prime Minister Sanae Takaichi. Takaichi na staunch supporter of aggressive monetary stimulus. Kuroda talk say di BOJ suppose pay close attention to crude oil prices, as dem fit surge more if di conflict for Middle East drag on, wey go cause inflation to rise more quickly.
“If di impact serious, (di bank) fit need to accelerate rate hikes or even move beyond neutral to tightening,” Kuroda talk. Di former BOJ governor also question di effects of Takaichi’s aggressive fiscal policies, e talk say “There is no need at all to stimulate (di economy), wey go only boost inflation” for time wey di economy dey hold firm.
As for di ongoing discussions between di government, ruling and opposition parties about eliminating di 8 percent consumption tax on food items, Kuroda talk say consumers no dey demand such tax break again since rice prices don begin to fall. E talk say dem no get convincing plans to cover di tax revenue shortfall.
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