Tokyo, Dec 25 (EFE).- The governor of the Bank of Japan (BoJ), Kazuo Ueda, insisted this Thursday on the importance of maintaining the path of increases in the organization’s interest rates to ensure that Japanese inflation stabilizes around 2% and achieve a basis for stable wage growth.
“Appropriately adjusting the degree of monetary easing will lead to sustained growth, which will provide a basis for companies to do business with confidence,” Ueda said during a speech to business leaders in Tokyo, in statements reported by the business daily Nikkei.
The person in charge, as usual, subordinated the pace of the increases to economic conditions, but firmly stressed his expectations that salaries will gradually grow at the same level as prices.
“The possibility of returning to a so-called ‘zero norm’ world, where wages and prices remain almost unchanged, has diminished significantly,” he said.
Ueda’s words come after the BoJ last week raised the reference interest rate to 0.75%, its highest level in 30 years, with a view to stabilizing the increase in prices in the country, stagnant around 3% for months.
After decades of deflation and the stagnation of real wages, the cycle of price growth is weighing on households, and the new Executive of Prime Minister Sanae Takaichi has approved a multi-million dollar stimulus package to put the battered Japanese economy back on track.
The expected increase in public spending, however, has made investors nervous, who have reacted by selling yen, contributing to the currency’s weakness, and raising the yield on 10-year debt bonds to levels not seen since the late 1990s. EFE
jdg/llb
