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BOJ's Iwata: Focus On Price Stability, Not Asset Prices

Jackson HoleのコンファレンスでBoJ岩田副総裁の講演が1日に行なわれた。報道ではDow Jonesで以下のように報じられた。

BOJ's Iwata: Focus On Price Stability, Not Asset Prices
September 1, 2007 4:45 p.m.

JACKSON HOLE, Wyo. (Dow Jones)--Bank of Japan Deputy Gov. Kazumasa Iwata said Saturday that monetary policy should focus on price stability, not asset prices.

Iwata made his remarks at the Federal Reserve Bank of Kansas City's annual Jackson Hole conference.

His remarks didn't address Japan's economic or monetary policy outlook.

The BOJ held rates steady last month. Before the global market turmoil, markets had expected the Japanese central bank to raise rates.

Iwata said that land prices in Japan have "bottomed out" with commercial land prices rising and that its core consumer price index hovers around zero.


15. I feel inclined towards the indirect approach to asset prices; namely that monetary policy should be oriented toward enhancing price stability and smoothing fluctuations in GDP gap, while refraining from targeting asset prices directly, given the limited knowledge to correctly detect fundamental asset prices.


21. Given the asset price boom and bust in the latter half of the 1980s, and the subsequent persistent deflation after 1998, the "new policy framework for the conduct of monetary policy" was announced in March 2006. Aside from the first perspective, which examines the likely development within forecast period, the new policy framework incorporated as a second perspective an examination of potential risks beyond the forecast period. Today, we observe that land prices have bottomed out with the significant rise in the price of commercial land, while the core CPI hovers around zero against a background of rising utilization ratio and a tightening of labor market conditions. We must recall that behind the aggressive risk-taking in the latter half of the 1980s there was the market perception of long-sustained low interest rates for the future under price stability. It may be useful to carry out an exercise to demonstrate the consequences of long-sustained low interest rates and the financial imbalance on the future development of economic activity and prices. This may further clarify the role and merits of the two perspectives in our new policy framework.






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