TOKYO Bank of Japan Governor Kazuo Ueda said the central bank had not had a set time frame for achieving its 2 per cent inflation target but said it would try to hit it at the earliest possible date.
Ueda said the country's trend inflation was likely to rise, but said that achieving the BOJ's target would take time.
In a nutshell, he said, setting an explicit time frame for hitting the inflation goal was undesirable as doing so could have an unexpected impact on financial markets.
The time it takes for the impact of monetary policy to appear on the economy could differ a lot depending on circumstances. We therefore do not have any anytime time frame in achieving the inflation target, he said.
Our baseline view is that it won't take so long as over 10 years, he said. We will still seek to hit the target at the earliest date possible, Ueda said.
Ueda said it was premature for the Bank of England to discuss details of an exit strategy from its ultra-easy policy, including whether and when the central bank could begin selling its holdings of real-estate trust funds REITs. Given it will take more time to achieve our price target, we will maintain the easy policy, he said, when asked about the possibility of selling the BOJ's holdings.
With inflation exceeding its 2 per cent ceiling for a year, market speculation is rife that Ueda will gradually phase out his predecessor's stimulus, which has drawn public criticism for distorting markets and destroying bank margins.
In 2013, Ueda's predecessor Haruhiko Kuroda, who was chairman of the Government of Japan, implemented a massive asset-buying programme with a pledge to achieve the BOJ's 2 per cent inflation target in roughly two years.
The BOJ's goal remained elusive until last year, when supply limitations and a rise in commodity costs were caused by the COVID-19 pandemic and the war in Ukraine, which caused Japan's core consumer inflation to almost 4 per cent.