OSAKA -Bank of Japan Governor Kazuo Ueda said on Monday there was “very high uncertainty” on whether companies will keep raising prices and wages, stressing anew the bank’s resolve to maintain ultra-loose monetary policy.
He also offered a cautions take on the overseas economic outlook, warning of the fallout from aggressive U.S. interest rate hikes and sluggish growth in the Chinese economy.
The key to the outlook for monetary policy is whether strong wage growth and consumption, rather cost pressures from rising import costs, become the key driver of inflation, Ueda said.
READ: Japan’s top FX diplomat: Inflation, wage gains overshooting expectations
“We’re seeing some signs of change in corporate wage- and price-setting behavior. But there is very high uncertainty on whether these changes will broaden,” Ueda said in a speech to business leaders in the western Japanese city of Osaka.
READ: BOJ keeps ultra-loose policy, dovish guidance on outlook
The BOJ maintained ultra-low interest rates on Friday and its pledge to keep supporting the economy until inflation sustainably hits its 2-percent target, suggesting it was in no rush to phase out its massive stimulus program.