BOJ Sees End To Deflation

Posted on 09/22/2023

With prices rising in Japan, the Bank of Japan can see the potential for an end to monetary easing and stimulus. BOJ leaders and government officials now indicate there could be a change in policy coming soon. Industry Minister Yasutoshi Nishimura said “Inflation is now accelerating. Given what’s happening across the globe, policy aimed at buying time will eventually end and normalize.” BOJ Governor Kazuo Ueda told the Yomiuri Shimbun newspaper he was looking into “various options,” to normalize. Ending negative rates is foremost among them.

In Japan, 10 year yields hit 0.725% this week. The yen trades at nearly 150 to the dollar. Inflation is at 3.1%, an improvement but still above the target of 2%. Food and dining prices are rising over 6%. Experts say a change in policy will come in the winter of 2023 or spring of 2024.

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