Bank of Japan Gov. Kazuo Ueda said the central bank’s lifting of its negative interest rate policy will become an option if wages and prices rise, revealing his thinking during an interview with The Yomiuri Shimbun.
Ueda said that “there are various options” including lifting the negative interest rate policy once the central bank is confident that Japan has achieved sustainable price increases accompanied by rising wages.
The negative interest rate policy is a pillar of the Bank of Japan’s large-scale monetary easing measures.
While an easy monetary policy environment will be maintained for the time being, signs of factors could emerge that would allow a decision to be made by the end of the year, he indicated.
This is the first time Ueda has given an exclusive interview to any media organization since taking office in April of this year.
At present, he takes the position of maintaining the bank’s monetary easing policy, saying: “There is still some way to go before the price target can be realized. We will continue our persistent monetary easing policy.”
The Bank of Japan is currently implementing monetary easing measures to guide the short-term interest rate to minus 0.1%.
When asked about the timing of the lifting of the rate policy, Ueda said, “We have a variety of options if economic and price conditions turn upward.”
“We will [lift the policy] when we conclude that the price target can be achieved even after the lifting of the negative interest policy,” he said.
As for specific timing, Ueda said a stage has not yet been reached where the bank can make a definite decision.
“It is not impossible that we will have enough information and data by the end of this year,” including the outlook for wage increases next spring, he said.