Suntory’s CEO calls for clarity at BOJ

The head of Suntory Holdings Ltd, Takeshi Niinami, said yesterday he expected the next governor of the Bank of Japan (BOJ) to show a clear policy roadmap, including criteria for ending its practice of controlling both long- and short-term interest rates.

Niinami, an influential leader who is expected to become the next chairman of business lobby Keizai Doyukai in April, also said he wanted to keep lifting wages for Suntory employees while the cost of living kept rising — not just to support their living standards but also to activate economic growth led by the private sector.

With the end of the term of current BOJ governor Haruhiko Kuroda coming up in April, Japanese business managers and investors are focused on the course of monetary policy to be adopted by his successor.

The BOJ stuck to its ultra-easy policy at a two-day policy meeting that ended on Jan 16, defying investors who had bet on it ceasing to defend a cap on the 10-year government bond yield. The cap is part of a policy called yield curve control (YCC).

But Niinami said expectations were growing that the BOJ would sooner or later end its expansionist experiment.

“The ultra-easy policy can’t be kept forever, given current (economic) conditions. The market knows that,” Niinami told Reuters in an interview.

“The timing of when to end the YCC and to enter the next phase, and guidelines of when we can expect the (policy) exit ... we need to see a clear roadmap like that, one that is easy to understand.”

Niinami also said economic growth led by the private sector would be needed to help prevent Japan’s financial health worsening further.

To help employees cope with rising prices, Suntory planned to raise wages by about 6% in the fiscal year beginning on April 1, he said. The company hoped to continue raising wages as long while inflation persisted, he added.

“This is our corporate responsibility. We need to manage the company that is able to hike wage and to motivate employees,” said Niinami, also a former chairman of convenience store operator Lawson Inc.