TOKYO, Reuters – Asahi Naguchi (Bank of Japan) stressed the importance of the central bank “patiently continuing” its current monetary easing. It takes a while to reach its 2% inflation target during the coronavirus pandemic.

Noguchi spoke cautiously about Japan’s economic outlook in a speech. She said it would be clearer by the end of the year as more vaccines are being distributed to lessen the COVID-19 effects.

Noguchi said that there are also downside risks, such as the spreading of variants and its impact on supply chain logistics in the auto industry. Uncertainty remains high.

Yoshimasa Maruyama (chief market economist, SMBC Nikko Securities) said that “What is most striking about today’s speech was the fact Noguchi suggested Japan is unique from other countries facing rising inflation.”

It’s clear that global inflation was on G20 agenda. Japan, however, is still suffering from disinflation. Noguchi did not signal a need to alter monetary policies immediately.

Noguchi, an academic advocate for massive easing, joined in April a board split by members concerned about rising costs of continued easing and those who support stimulus.

A policy known as yield curve control, the BOJ keeps short-term interest rates low at 0.1% while 10-year yields hover around 0%. The BOJ also invests in government bonds to reach its goal of 2% inflation.

However, decades of loose policy has failed to increase inflation. Weak consumption means that firms can’t charge more for goods and services. This keeps inflation at a low 2% target.