Former Bank of Japan governor Haruhiko Kuroda declared that the inflation target achieved a virtuous cycle. He gave an interview to The Yomiuri Shimbun on April 30. Kuroda stated that rising wages and prices have taken hold in the economy. Consequently, the inflation target achieved means the BOJ’s 2 percent goal is met. He also suggested raising the current policy rate from around 0.75 percent to 1.5 percent. Kuroda explained that the neutral rate of interest now stands at roughly 1.5 percent.
This inflation target achieved comes after years of massive monetary easing under Kuroda. He served as BOJ governor from 2013 to 2023. His successor, Kazuo Ueda, has handled normalization appropriately, Kuroda said. However, the BOJ decided against a rate hike at its April 27-28 meeting. Soaring crude oil prices from the Middle East crisis prompted that cautious decision. Kuroda supported the wait-and-see approach. When both inflation and slowdown risks exist, waiting is very appropriate, he explained. He does not feel the BOJ is falling behind the curve.
The inflation target achieved also changes Kuroda’s view on the yen. During his tenure in April 2022, he said a weaker yen benefits the economy. Now he called 160 yen per dollar too weak. He stated that around 130 to the dollar would be more appropriate. Therefore, the inflation target achieved allows for a stronger currency without harming growth. Kuroda expressed concern about Prime Minister Sanae Takaichi’s accommodative policies. He argued that the Japanese economy is doing fairly well. There is no need to boost spending or conduct monetary easing, he warned. Such actions would only lead to more inflation.
Kuroda, now 81, served as vice finance minister for international affairs. He also led the Asian Development Bank before his BOJ tenure. The interview took place on April 30, 2026. Looking ahead, Kuroda’s remarks may influence BOJ policy debates. His successor Ueda faces pressure to raise rates gradually. Nevertheless, global oil prices and Middle East tensions complicate any swift moves. The inflation target achieved gives the BOJ room to normalize. However, Kuroda warns against excessive fiscal or monetary stimulus.
Takaichi’s government has not yet responded to his critique. Market analysts expect a rate hike later this year. The yen’s recent weakness to 160 may force earlier action. Kuroda’s shift from yen weakness advocate to critic is notable. His long experience gives weight to his current views. Ultimately, the inflation target achieved marks a historic turning point for Japan’s economy. The BOJ must now navigate the path back to normal policy without triggering a recession.
