Japan's Central Bank Struggles with Inflation, Analysts Predict Policy Adjustments

Analysts are divided on the Bank of Japan's response to consistently high inflation, with some suggesting that the central bank has been "wrong-footed" on the issue. Japan's core inflation has exceeded the BOJ's 2% target for 15 consecutive months, prompting speculation about a potential shift in the bank's ultra-loose monetary policy, particularly its "yield curve control" policy. While some economists view the rising prices as transitory, others believe sustained inflation may materialize due to wage hikes and other factors. The BOJ's bond purchases have increased to maintain the YCC policy, leading to concerns about the bank's expanding ownership of the bond market.