TOKYO – It is “too early” for the Bank of Japan to tighten monetary policy as the economy’s recovery from the coronavirus pandemic has just begun, Deputy Governor Masazumi Wakatabe said Thursday.

Wakatabe’s statement came as some financial market players have suggested that the BOJ should move toward tightening monetary policy before achieving its 2 percent inflation target to keep in step with U.S. and European central banks, which are shifting toward normalization to tamp down prices.

“Given the current situation in which Japan’s economy has finally started to pick up from the pandemic, it is definitely too early for the bank to start tightening monetary policy when the target has not yet been achieved as this could hinder the economic recovery,” he said in a speech.

During an online meeting with business leaders in Wakayama Prefecture, he also said reaching the target means that the year-on-year growth rate of the consumer price index should be at 2 percent or more for a certain period, not “merely for one month or a few months.”

Japan is still struggling to achieve the target, but some economists predict the core CPI could increase toward 2 percent in the coming months as the impact fades of cuts in mobile phone fees that started last spring and raw material costs remain high globally.

As for one of the major reasons behind the BOJ setting the inflation target at 2 percent, Wakatabe said, “If inflation is zero percent, temporary factors can easily lead to deflation.”

He said the BOJ is continuing with monetary easing not just for the sake of trying to raise prices but to create a “virtuous cycle” to increase “wages, income, and employment, thereby boosting business activity.”