BoJ Governor Ueda: Will patiently maintain the easy policy
17.11.2023, 01:15

BoJ Governor Ueda: Will patiently maintain the easy policy

Bank of Japan (BoJ Governor Kazuo Ueda was out with some comments this Friday, saying that Japan's economy is recovering moderately and is likely to keep recovering moderately.

Key Quotes:

  • Capex rising moderately.
  • Japan’s' trend inflation is likely to gradually accelerate toward 2% through fiscal 2025.
  • Must carefully watch the impact of market moves, including FX, on the economy, and prices.
  • Will patiently maintain the easy policy.
  • We cannot say yet with conviction our price target will be stably, sustainably met.
  • Important to scrutinise whether Japan sees a positive wage-inflation cycle.
  • Will take some time but inflationary pressure driven by cost-push factors is likely to dissipate.
  • There is still high uncertainty on whether Japan can see a positive wage-inflation cycle.
  • The government and BoJ share a view on the desirable direction of the economy, inflation.
  • Don't expect the 10-year JGB yield to rise sharply above our 1% reference even if yields come under upward pressure.
  • We will consider ending YCC, negative rate if we can expect inflation to stably, and sustainably hit the price target.
  • In what order, what part we will change policy will depend on economic, price, and market developments at the time.

Market Reaction:

The Japanese Yen (JPY) reacts little to the dovish remarks, though the prevalent US Dollar (USD) selling bias keeps the USD/JPY pair on the defensive near mid-150.00s through the Asian session on Friday.

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