"Stubborn Despite SME and Commoners' Hardship"... Japanese Media Criticize BOJ's Persistence on Easing Policy

Small and Medium Enterprises Urge Resolution of Yen Weakness
Household Price Increases Raise Living Cost Burden
BOJ Maintains Policy Amid Fiscal Strain and Debt Concerns
Views of Avoiding Blame for Economic Recession

The yen-dollar exchange rate surpassed 149 yen, marking its lowest point in 10 months. However, Kazuo Ueda, Governor of the Bank of Japan (BOJ), who should be defending the exchange rate, has only reiterated his intention to maintain the easing policy, drawing criticism for neglecting small and medium-sized enterprises (SMEs) and ordinary citizens.

Kazuo Ueda, Governor of the Bank of Japan.

On the 25th, Governor Ueda attended a meeting with executives of Kansai economic organizations and stated, "While I recognize that some SMEs are in very difficult situations, not all SMEs are in bad shape," indicating no intention to revise the accommodative monetary policy. He added, "I am aware that the impact of the weak yen varies depending on the size of the company," and said, "However, I want to carefully monitor price trends while sufficiently considering this." Shinichi Uchida, also a BOJ governor, attended the national securities conference that day and expressed his intention to continue the monetary easing policy to achieve the 2% inflation target.

The business community expressed dissatisfaction with the BOJ's stance. As inflation and yen depreciation coincide, companies are struggling with management difficulties. Masahiro Tani, vice chairman of the Committee for Medium and Small Enterprises, who attended the meeting, said, "Due to the weak yen, raw material import costs have surged, but subcontractors have no proper means to pass on the increased costs, which has hurt their management," urging, "We request that inflation be curbed and the weak yen situation be resolved."

Ordinary citizens are also struggling with the burdens caused by the weak yen and rising prices. According to a public opinion survey conducted last month by the Cabinet Office and Mainichi Shimbun, 92% of Japanese people responded that high inflation is significantly affecting their lives. Japan's Consumer Price Index (CPI) rose 3.15% year-on-year last month, exceeding the BOJ's 2% inflation target for 17 consecutive months.

Japanese media criticized the BOJ for being fixated on policy goals while ignoring the suffering of businesses and ordinary people. Asahi Shimbun pointed out, "The BOJ is sacrificing the public to achieve a stable inflation target of around 2%," adding, "No citizen would think that a monetary policy that encourages further price increases amid soaring inflation is desirable." Mainichi also reported, "Originally, the BOJ should have ended its easing policy following Europe and induced a rise in the yen's value," but "due to concerns about national fiscal difficulties and stock market downturns, it is hesitant to revise its policy."

There were also criticisms that the BOJ is maintaining its easing policy to avoid responsibility for falling prices. Inside the BOJ, there are concerns that if economic aftershocks occur after the end of the easing policy, the government might shift the blame onto the BOJ.

Asahi Shimbun reported, "Former Governor Masaaki Shirakawa reluctantly complied with the government's demand for easing policies but faced political criticism that shook the BOJ's independence," and added, "The BOJ under Ueda's leadership is also reportedly fearful that if the Japanese economy declines, it might have to bear all the responsibility."

This content was produced with the assistance of AI translation services.