Bank of Japan Deputy Governor Kikuo Iwata on Thursday defended the bank's massive stimulus programme, stressing that the subsequent weakening of the yen would benefit companies and households in the long run through higher profits and wages. The central bank expanded in October its "quantitative and qualitative easing" (QQE) programme, deployed in April last year to accelerate consumer inflation to 2 percent through huge asset purchases in a country mired in 15 years of deflation.
Critics argue that the programme has yet to boost wages enough and fuelled a sharp fall in the yen, which hurt households by pushing up the cost of imported goods. Iwata countered that view in a commentary published in the Nikkei economic daily on Thursday, arguing that a weak yen will boost exporters' revenues and allow them to raise wages, underpinning consumer spending.
"A weak yen (caused by QQE) will thus benefit households and other industries in the medium to long term," he said. Iwata also called for patience in measuring the effect of QQE, saying that it takes time for job markets to tighten enough to generate sustained rises in real wages.