Japan’s Kishida says up to BOJ to decide on exit from easy money policy

Japan’s Kishida says up to BOJ to decide on exit from easy money policy

© Reuters. FILE PHOTO: Japanese Prime Minister Fumio Kishida speaks during a news conference at the prime minister’s official residence in Tokyo, Japan October 14, 2021. Eugene Hoshiko/Pool via REUTERS

By Tetsushi Kajimoto and Leika Kihara

TOKYO (Reuters) -Japanese Prime Minister Fumio Kishida reiterated on Friday that it was up to the central bank to decide on an exit strategy from its massive stimulus programme, when grilled in parliament about the hit to households from the rising cost of living.

“It’s left to the Bank of Japan to decide on specific monetary policy, including the thinking on an exit from monetary easing,” Kishida told parliament.

“We hope the BOJ continues to make efforts to achieve its 2% inflation target,” he said.

Kishida’s comments came in response to a question from opposition lawmaker Hitoshi Asada, who called on the government to focus on structural reforms rather than rely too heavily on ultra-loose monetary policy to reflate growth.

“Ultra-loose policy can’t continue indefinitely. Without reform, it will only cause price hikes. We’re nearing the limit and a potential exit from easy policy,” Asada said.

With consumer inflation well below its 2% target, the BOJ has stressed it is in no rush to exit from ultra-easy policy and described recent cost-push inflation as transitory.

But some opposition lawmakers have warned of the hit to households from rising food and fuel prices, a sign creeping inflation is emerging as a political topic ahead of upper house elections scheduled later this year.

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