By Leika Kihara
TOKYO (Reuters) – Bank of Japan (BOJ) Deputy Governor Ryozo Himino said the central bank must determine the timing and appropriate design of an exit from ultra-loose monetary policy with a careful eye on developments in wages and prices.
He also said Japan was making progress in moving away from a prolonged period in which wage and price growth remained stagnant.
“Solid progress is observed in the transformation of firms’ wage- and price-setting behaviour,” Himino said in a speech on Wednesday.
“The BOJ should carefully monitor the evolution of wages and prices, judge the timing of the exit, and design its process,” he said, adding that Japan’s banking system was resilient enough to weather any stress that could emerge during the transition.
If done properly, an exit from ultra-loose policy would reap benefits for a wide range of households and companies through sustained rises in wages and inflation, Himino said.
(Reporting by Leika Kihara; Additional reporting by Tetsushi Kajimoto; Editing by Tom Hogue)