TOKYO (Reuters) – Japan’s top government spokesman said it was too early for the country’s central bank to exit from ultra-loose monetary policy, the Nikkei newspaper reported on Saturday.
“The Bank of Japan has just started (its easy monetary policy), so it’s too early” to debate an exit from its massive stimulus programme, Chief Cabinet Secretary Yoshihide Suga told the paper in a recent interview.
Suga said Prime Minister Shinzo Abe gives high marks to BOJ Governor Haruhiko Kuroda’s policies, the Nikkei said, a sign the government could reappoint him when his current five-year term ends in April next year.
Regardless of who the next BOJ governor would be, the central bank should stick to its pledge to achieve its 2 percent inflation target, Suga said.
On whether the government could declare an end to deflation next year, Suga said this was a possibility though the government has not made a decision yet.
“We won’t look good if the economy reverts back (to deflation) after we declare an end to it. So we’ll think about this cautiously,” he was quoted as saying.
Japan’s economy expanded for the seventh straight quarter in July-September thanks to robust exports and capital expenditure.
But years of heavy money printing by the BOJ have failed to drive up inflation, which remains distant from the central bank’s target as companies remain wary of raising wages.
Some BOJ policymakers have recently expressed concerns over the perceived demerits of monetary easing, suggesting the central bank may have to consider raising its yield targets or slow purchases of risky assets next year.
Kuroda has dismissed the chance of withdrawing stimulus any time soon, signalling that the BOJ will lag well behind its U.S. and European counterparts in ending crisis-mode policies.
The government is expected to select Kuroda’s successor early next year, which needs parliament approval. Many analysts see a good chance Kuroda will be reappointed for another term.
(Reporting by Leika Kihara; Editing by Kim Coghill)