Bank of Japan board member says yen fall helping exports, revenues
By Leika Kihara | February 20, 2013 4:49 PM EST
Bank of Japan policymaker Yoshihisa Morimoto on Wednesday reassured markets of the central bank's resolve to push on with monetary easing as a weaker yen and a pick-up in global demand look to be boosting the export-reliant economy.
Morimoto, a former utility executive, said the government also had a role in beating deflation, such as through deregulation and reforms to encourage more investment in new business areas.
"Recent exchange-rate moves will likely underpin exports and corporate revenues," Morimoto told business leaders in Kochi, western Japan, reiterating the BOJ's view the economy would recover as overseas growth picked up.
"The BOJ will continue to promote powerful monetary easing through steps including massive government bond purchases."
The world's third-largest economy has contracted for three consecutive quarters. Prime Minister Shinzo Abe, who won office in December, is pressuring the central bank to take bolder action to revive growth and end two decades of inflation.
Abe's push for fiscal stimulus and radical monetary easing has knocked the yen to 33-month lows against the dollar, helping underpin a stock market rally to 4-1/2 year highs.
PRICE, WAGE RISES
In January, the BOJ doubled its inflation target to 2 percent and made an open-ended pledge to buy assets from next year.
Two of the BOJ's nine-member board opposed the new inflation target, arguing that it far exceeded levels deemed sustainable and would not have much impact on expectations, minutes of the January meeting showed.
On Tuesday, Morimoto toed the central bank's official line, saying core consumer inflation was likely to approach 1 percent in the fiscal year ending March 2015, and may rise further if efforts to boost growth succeeded.
Any price rises must be accompanied by increase in wages to be sustainable, said Morimoto, who has always voted with the majority since joining the BOJ board in 2010.
"Prices must rise as a result of a sustained, balanced improvement in the economy accompanied by increases in jobs, wages and corporate revenues. That's our definition of price stability," he said.
(Reporting by Leika Kihara; Editing by Shinichi Saoshiro and John Mair)
Most Popular Slideshows
- Angelina Jolie & Brad Pitt Heads to Malta For New Movie After A Whirlwind French Wedding [PHOTOS]
- Prince William & Kate Middleton Caught Flirting In A Countryside Dinner Date [PHOTOS]
- Chris Martin Getting Serious With Jennifer Lawrence, Actress Joining Coldplay Tour [PHOTOS]
- 2014 US Open Update (Day 4 - Men's Singles): Murray, Djokovic, Raonic and Isner Advance to 3rd Round [PHOTOS]
Join the Conversation
- Tourre on stand says email in SEC case 'not accurate'
- Syrian authorities blocking access to needy in Homs - Red Cross
- Faith in European Union at low ebb, EU poll says
- Former UBS banker gets 18 months, $1 million fine, for muni bid-rigging scheme
- U.S. judge halts challenges to Detroit's bankruptcy bid
- Apple iPhone 6 Actual Release Date after September 9 Confirmed 128GB Variant with New Resolution
- Pricey iPhone 6 on Release Date Likely but with 3X Retina Resolution & Mobile Payment Service – Reports
- Google Nexus 8 Confirmed as HTC T1 aka Volantis/Flounder with Freshly-Leaked Specs & Features – Reports
- Moto G2 Release Roundup: Specs, Pricing, and Release Date Details
- PlayStation 4 Killing Xbox One Costing Microsoft Millions But It's Fine
- Nexus 6 on Release Date Confirmed with Phablet-Size Display as FCC Filing Hints of 5.9-Inch Screen
- Europe, US Next on ISIS’ Hit List, Says Saudi King; Seized ISIS Laptop Reveals Terrifying Bio-Warfare Plans