BOJ says strong chance CPI will moderate, but not to back below 2% by mid fiscal year

The Bank of Japan monetary policy meeting in June outcome is here:

In brief from today’s ‘summary'”

  • Appropriate to maintain current monetary easing
  • Wage growth needed,
    not just cost-push inflation, to sustainably, stably hit price target
  • Premature to shift
    policy as smaller firms becoming keen to hike wages, invest more
  • BOJ must maintain
    easy policy with eye on side-effects, as long-term risk to prices
    skewed to downside
  • BOJ must keep easy
    policy but must be mindful of chance it is under-estimating
    sustainability of Japan’s price rises
  • No need to make
    operational tweaks to YCC as distortion in shape of yield curve has
    been resolved
  • BOJ must consider
    reviewing YCC at an early stage, even as it maintains easy monetary
  • Bond market function improved but still remains at low level
  • There is uncertainty
    on whether inflation, after slowing toward middle of current fiscal
    year, will bounce back
  • Rise in Japan’s
    inflation increasingly driven by domestic factors
  • Inflationary pressure likely to remain strong for time being
  • There is strong chance consumer inflation will moderate, but won’t
    slow back below 2%, toward middle of current fiscal year

Wow that last point seems very significant! The BOJ has been arguing, over and over it expects CPI to drop from around September/October, but if not below target then surely policy much be adjusted (tightened?)

Full text is here:

This article was written by Eamonn Sheridan at Source