TOKYO (Reuters) - Bank of Japan Governor Haruhiko Kuroda on Friday dismissed the chance of raising the bank’s long-term interest rate target just because inflation reaches 1 percent.
Some have called on the BOJ to raise its bond yield target before inflation hits the bank’s 2 percent target, arguing that 2 percent was too high a level to aim for in a country that has suffered from two decades of deflation.
“As European and U.S. central banks normalize monetary policy and Japan’s inflation picks up, markets may put upward pressure on long-term interest rates,” Kuroda told parliament.
“I’m hesitant and cautious at this stage of immediately yielding to such market pressure and raising our long-term yield target,” he said.
Reporting by Leika Kihara and Tetsushi Kajimoto; Editing by Chang-Ran Kim