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BOJ 2% inflation goal 'reasonable' for Ueda to keep: ex-N.Y. Fed chief

Dudley 'cautiously optimistic' about Kuroda's easing but says 'premature' to judge

The Bank of Japan under new governor Kazuo Ueda should stick with its 2% inflation target, says William Dudley, former president of the Federal Reserve Bank of New York. (Photo by Hideyuki Miura)

NEW YORK -- As new Bank of Japan Gov. Kazuo Ueda takes the reins from predecessor Haruhiko Kuroda, a former president of the Federal Reserve Bank of New York argues that he should stay the course on targeting sustained 2% inflation.

Though prices are now up more than 4% annually, Japan has experienced "no meaningful acceleration in wages in recent years despite a tight labor market," William Dudley told Nikkei, noting that such wage growth usually is necessary for stable inflation. "Now the BOJ is trying to confirm that the [current] inflation will lead to higher inflation expectations and higher wages."

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