BOJ Policymaker Calls for More Time Before Phasing Out Stimulus

Toyoaki Nakamura Highlights Uncertainty Over Global Outlook and Need for Continued Ultra-Loose Policy

Bank of Japan board member Toyoaki Nakamura said the central bank will likely need more time before phasing out its massive stimulus, playing down the chance of a near-term end to its negative interest rate policy.
Japan's continued economic recovery, tight labor market and an increasing number of workers switching jobs are heightening the chance that wage growth will eventually exceed the pace of inflation.
Real wages fell from year-before levels for the 18th straight month in September as inflation hit 2.8% due largely to cost-push factors.
Nakamura warned of heightening uncertainty over the global outlook due to lingering inflationary pressure, the potential fallout from aggressive monetary tightening by major central banks and geo-political tension in the Middle East.
Under yield curve control (YCC), the BOJ guides the 10-year bond yield around 0%. It also applies a 0.1% charge on a small portion of excess reserves under its negative rate policy.