BOJ risks being behind the curve on inflation: ex-central bank economist

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BOJ risks being behind the curve on inflation: ex-central bank economist
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TOKYO - The Bank of Japan may be underestimating the risk of being too late in addressing mounting inflationary pressures from rising service prices and wages, the central bank's former top economist said.

The BOJ projected inflation would recede below 2% in 2025, when cost-push factors run their course and begin to be replaced more fully by upward pressure from higher wages. "While cost-push inflation remains the key driver of price rises now, we're also seeing service prices rise steadily. Wages are also likely to increase significantly next year," Kameda said in an interview on Wednesday, a day after the bank loosened the 1% cap on its target for long-term bond yields.

Kameda said he expects the BOJ to take further steps to phase out its bond yield control policy, before ending negative short-term rates as early as April.

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