BOJ’s Nakamura: Central bank must patiently maintain powerful monetary easing

Japan's economy picking up as impact of pandemic subsides.

Japan's economy likely to recover as impact of pandemic, supply constraints ease.

Japan's consumer inflation likely to accelerate on boost from energy, fuel costs but narrow pace of increase thereafter.

BOJ must patiently maintain powerful monetary easing.

Tightening monetary policy when output gap remains negative would weigh heavily on economic activities of households, companies.

When prices are rising sharly due to cost-push factors, targeted policy response, rather than monetary policy shift that curbs demand, is more effective.

Gap between inflation in japan and other economies is due largely to slow wage growth.

Japan must achieve 2% inflation in sustainable, stable fashion.

Japan's economy is not yet in a state where it can achieve BOJ’s price goal in sustained, stable fashion .

There appears to be a shift in long-held mindset in japan that prices won't rise much.

Wage increases are broadening in Japan reflecting pick-up in economy.

Winter bonus payment and next year's wage negotiation key to whether rise in wages will continue to rise next year and beyond.

BOJ is carefully watching impact of financial, fx market moves on japan's economy, prices and wages.

There is a risk fears over resurgence in covid infection cases could weaken pent-up demand, delay recovery in inbound tourism.

If China re-expands covid curbs, that could prolong supply disruptions and hurt japan's exports, output and capex.

Fears are emerging in global markets on whether central banks can balance need to curb inflation, avert recession.

If such fears heighten sharply, that could tighten global financial conditions, trigger sharp slowdown in overseas economies.