Japan's Govt, Central Bank Debate Whether A Sustained Exit From Deflation Is Near

• A meeting of the government's top economic council on Monday focused on whether recent rises in inflation and wage growth suggest Japan was approaching a sustained exit from deflation.
• With inflation accelerating globally and wage growth picking up in Japan, discussions also touched on the desirable timing to end the Bank of Japan's ultra-loose monetary policy, a government official told reporters.
• With inflation exceeding the BOJ's 2% target, markets are rife with speculation that the central bank will soon phase out its massive stimulus that combines huge asset purchases and a pledge to cap long-term interest rates around zero.
• However, data showing Japan's wholesale inflation slowed for a fourth straight month in April may ease pressure on the BOJ to seek an early exit from ultra-low interest rates. The top economic council occasionally holds a separate session on topics relevant at the time, to take their views into account in setting fiscal and monetary policy.

(Source: Reuters)