Japan business lobby head: BOJ must normalise monetary policy as soon as possible (updated)

Tokura

18/12/2023 08:03

(Adds quotes, details)
    By Tetsushi Kajimoto
       TOKYO, Dec 18 (Reuters) - Japan business lobby Keidanren
chief Masakazu Tokura said on Monday the Bank of Japan must
normalise monetary policy as early as possible, amid speculation
the central bank could shift away from more than a decade of
stimulus policy in the coming months.
    Speaking on the first day of the BOJ's two-day policy
setting meeting, the outspoken Keidanren head said the central
bank's stimulus policy, including negative interest rates,
should be ditched in the "not so distant future". 
    He cited changes in real interest rates.
    In the United States, inflation and real interest rates have
stabilised, while in Japan, real interest rates may have turned
into negative territory, prompting speculation Japan could alter
its longstanding policy of monetary easing, Tokura said.
        "I don't know if it happens this year, April or ...
further down the road," he said of a monetary policy change.
        "The BOJ is aiming to put a complete end to deflation so
I understand they are cautious, making sure to make it right,"
he said.
        Tokura added that business circles were striving to
continue sustainable wage hikes and structural wage hikes if
possible by raising base salaries next year as well.
        "(The) market does not want interest rate policy that is
not in harmony with fundamentals, which would kill the economy,"
he said.   

 (Reporting by Tetsushi Kajimoto; Editing by Jacqueline Wong and
Jamie Freed)
 ((tetsushi.kajimoto@thomsonreuters.com; +81-3-6441-1829;))