Bank of Japan prepares for major reforms

Senior economist Koya Miyamae said that various economic indicators show that Japan’s labor shortage is returning to pre-epidemic levels or worse, and there is a lot of pressure to raise wages. The BOJ will use the results of the review to back its moves, gradually building the case for a major overhaul of its stimulus framework in the second half of 2024. Economist Taro Kimura said BOJ Governor Kazuo Ueda realized that the current stimulus framework that controls the yield curve is not sustainable. Kimura said the official was also cautious about abandoning stimulus too early, based on Kazuo Ueda’s experience as a board member voting against premature rate hikes in the early 2000s. Instead, he said, he would use the review to support reforms after a modest start at the helm.