Bank of Japan Governor Ueda is serving up some reasons to sell JPY today!
- We will make a judgment call by looking at various indicators, in determining whether underlying inflation has hit our target
- Just looking at single indicator won’t be sufficient in grasping underlying inflation, which indicator to focus on could change gradually during course of time
- If food inflation is temporary, we shouldn’t respond with monetary policy
- If sustained rises in food prices lead to broader inflation, push up service prices, that could lead to wide-ranging inflation that could require raising interest rate
- Japan is shaking off deflationary mindset, but still one step short of seeing wage-inflation cycle kick off in sustainable fashion
- Japan’s short-term, real interest rate currently around -2%
- We are always vigilant to possibility underlying inflation may accelerate at pace faster than we project
- We are making projections, deciding policy to ensure underlying inflation does not accelerate much faster than we project
- There is some room for allowance in our 2% inflation target
- The BoJ has no plan to immediately offload ETF holdings
- Would like to take time examining whether to unload our ETF holdings or not
- Won’t completely rule out option of permanently holding onto our ETF holdings
- I am aware there are various ideas, proposals on what to do with BoJ’s ETF holdings but won’t comment on each of them
- Speaking about interim plan on what to do with BoJ’s ETF holdings, before it is finalised, could have unintended impact on markets
Earlier:
- Bank of Japan Governor Ueda says expects underlying inflation to accelerate gradually
- Bank Japan Governor Ueda says cost-push inflation factors likely to gradually dissipate
This article was written by Eamonn Sheridan at www.forexlive.com.