Kuroda: Japan not ready for monetary tightening

Bank of Japan Governor Kuroda Haruhiko says he intends to stick with his monetary stimulus policy as the country's economy is still recovering from the impact of the coronavirus pandemic.

In a speech on Monday, Kuroda said "Japan is absolutely not in a situation that warrants monetary tightening. Our top priority is to persistently continue with the current aggressive monetary easing and thereby firmly support economic activity."

He said that Japan's economy hasn't recovered to the extent seen in Europe and the United States, and that the recent hike in international commodity prices is putting downward pressure on wages in Japan, which imports a large share of its resources.

Kuroda went on to say that shoring up economic activities is most important. He said the bank will aim to create an environment that encourages wage hikes to achieve sustainable price increases, which means staying with monetary easing.

Kuroda also said households are becoming more accepting of higher prices, which he called "a crucial change" when aiming for sustainable price hikes.

He said the key will be to bring about full-scale pay increases while households remain tolerant of higher price tags.