Tamura details Japan's economic activity, prices, and monetary policy
Bank of Japan Policy Board Member Naoki Tamura presented an assessment of Japan's economic activity, prices, and monetary policy on February 13, 2026. The speech was delivered at a meeting held by the Kanagawa Keizai Doyukai.
Japan's economic landscape and inflation trends
Board Member Tamura provided a comprehensive overview of Japan's current economic conditions, noting a gradual recovery supported by robust domestic demand and a resilient labor market.
He highlighted that private consumption continues to show signs of improvement, albeit with some lingering caution among households due to cost-of-living pressures.
On prices, Tamura stated that the consumer price index (CPI) has remained above the Bank of Japan's 2 percent target, driven primarily by pass-through effects of past import cost increases and a tightening labor market.
He emphasized that while inflation expectations are gradually rising, the Bank remains vigilant regarding the sustainability of these trends.
Tamura reiterated the BOJ's commitment to achieving its price stability target in a stable and sustainable manner, underpinned by a virtuous cycle of wages and prices.
He also touched upon global economic uncertainties, such as geopolitical risks and commodity price volatility, as factors influencing Japan's economic outlook.
Navigating the policy path
Regarding monetary policy, Tamura reaffirmed the Bank of Japan's current accommodative stance, designed to foster a positive economic environment where the 2 percent inflation target can be achieved sustainably.
He discussed the ongoing effects of yield curve control (YCC) and the negative interest rate policy, explaining their role in supporting economic activity and encouraging investment.
Tamura acknowledged the complexities of exiting from prolonged unconventional monetary easing, stressing the importance of a careful and data-dependent approach.
He indicated that the BOJ will continue to monitor economic activity, prices, and financial conditions closely, adapting its policy as necessary to ensure price stability while supporting the economy.
The Board Member underscored that the Bank's primary objective remains to achieve its price target accompanied by wage growth.
Cautious optimism, persistent challenges
Tamura's speech reflects a delicate balancing act for the Bank of Japan, acknowledging positive inflation momentum while emphasizing the need for sustained wage growth.
The persistent global uncertainties and the nuanced domestic demand recovery suggest that any significant policy shifts will remain highly data-dependent and gradual.
Ultimately, the path to a truly stable 2 percent inflation, free from external shocks, still appears long and fraught with potential hurdles.