Prolonged Low Interest Rate to Risk Exessive Easing: BOJ Chief

Tokyo, Dec. 25 (Jiji Press)--Bank of Japan Governor Kazuo Ueda warned Wednesday that if the BOJ keeps its policy interest rate at the current low level for a prolonged period, the move could make the central bank's monetary easing "excessive."

The bank will "raise the policy interest rate and adjust the degree of monetary accommodation" if it sees the economy and prices continue to improve in line with its projections, Ueda said in a speech at a meeting of the Japan Business Federation, or Keidanren, in Tokyo.

On next year's "shunto" spring labor-management negotiations, which the BOJ is watching closely, Ueda noted, "What is important is that wage hikes that are consistent with 2 pct inflation take hold in society as a matter of course."

Then he forecast that Japan's inflation rate will come close to the BOJ's sustainable, stable target of 2 pct accompanied by wage increases in 2025.

The BOJ chief mentioned "high uncertainties" particularly associated with economic policies to be adopted by Donald Trump after his inauguration as U.S. president next month.

[Copyright The Jiji Press, Ltd.]