Japan’s central bank likely to normalise monetary policy

The Bank of Japan (BOJ) is likely to normalise its ultra-loose monetary policy soon, a move that coincides with growing momentum for wage increases, the chairman of Keidanren, Japan’s leading business lobby, stated on Monday, according to Reuters.

Masakazu Tokura expressed optimism at a news conference about the current year’s spring wage negotiations, noting that there is more momentum for wage hikes compared to the previous year, adding that he was hopeful that pay increases will not be limited to large corporations but will also reach smaller firms.

Furthermore, Tokura mentioned that he sees a higher probability of Japan achieving the central bank’s 2 per cent inflation target. He added that there is a high chance that the BOJ will shift towards policy normalisation in the not-so-distant future, although he was uncertain whether this change would occur as early as March.