BOJ Ueda says YCC policy side effect risk is of greater market, including FX, volatility

Bank of Japan Governor Ueda, headlines via Reuters:

  • When BOJ talks about side-effects of YCC, it includes risk of
    triggering volatility in markets including for FX
  • Desirable for FX to
    move stably reflecting fundamentals
  • If YCC heightens FX
    volatility, that is seen as among side-effects of our policy, when
    asked BOJ views sharp yen falls as side-effect of YCC
  • Recent high
    inflation driven by rising import prices and domestic factors, but
    latter still somewhat weak
  • Hope to see overall
    inflation slow as cost-push factors dissipate but in medium- to
    long-run, want to see inflation gradually accelerate
  • Well aware underlying price rises hurting households, companies but
    don’t expect this to last very long
  • When looking at
    trend inflation there is still some distance toward 2%, which is why
    we are continuing with massive monetary easing
  • We are continuing to
    buy huge amounts of govt bonds via market operations so 10-year JGB
    yield does not too much above 1%

I’m not reading anything here from Bank of Japan Governor Ueda to indicate any reduction in easy policy is imminent.

More market and FX volatility?

not that anything wrong

This article was written by Eamonn Sheridan at Source