BOJ’s Noguchi says biggest focus is if wage rise momentum will be sustained or not

Bank of Japan policy board member Noguchi:

  • Biggest focus is whether wage hike momentum will be maintained or not
  • Raising of YCC
    allowance band does not signify a tightening of monetary policy
  • If central banks
    hold rate hikes and inflation comes down, the risk of hard landing
    will be reduced
  • Japan’s economy
    recovering gradually
  • When inflation
    expectations are in a stage of rising, some flexibility is needed to
    continue easy policy under YCC
  • Chinese economy
    facing risk of deflation or ‘Japanisation’
  • Need to pay close attention to fiscal, monetary policy response to
    low inflation by Chinese authorities from now on
  • There are signs of
    upward price pressures coming down
  • BOJ’s near-term
    mission is to realise a situation where wage growth does not fall
    short of inflation as soon as possible through persistent monetary
  • The trend of passing
    on costs for raw materials is widely continuing
  • Japan needs to shake
    off the ‘zero norm’ of prices and wages in order for nominal wage
    increase to exceed 2% as a trend
  • 3% nominal wage
    growth would correspond with 2%
    inflation target

USD/JPY is barely moving. Waiting on the US CPI tonight is the theme for the day today.

This article was written by Eamonn Sheridan at Source