BoJ Governor Kuroda (post-meeting press conference) says must be vigilant to the impact of FX moves; CPI to undershoot 2% from next year; will not hesitate to ease monpol if needed
- Must be vigilant to financial and currency market moves and their impact on Japan's economy and prices.
- It is important for currencies to move stably, reflecting fundamentals.
- Yen weakening has been one-sided.
- Rapid JPY moves are negative, and undesirable for Japan's economy, making business planning difficult.
- Says he has no comment on FX interventions.
- Government has taken appropriate steps against excessive FX volatility.
- Does not think weak JPY is an opportunity to achieve inflation target since current inlfation is not stable or sustainable in tandem with wage growth.
- Says BoJ monpol does not target FX rates; says Japan has a history of suffering from the strong yen.
- FX traders are paying attention to interest rate differentials.
- It is not correct to explain the USD strength only based on interest rate differentials.
- Notes Japan's situation is different from the US and europe, where central banks are tightening rapidly to curb inflation.
- Thinks a severe recession from overseas monetary policy tightening is unlikely, although BoJ must think of the risks given outlook remains uncertain.
- US-Japan interest rate differential has little correlation with USDJPY rate when looking at past levels.
- Does not think yield curve control is causing yen to weaken.
- Will continue to pay attention to the lowering of bond market functioning.
- Nobody thinks that YCC has anything in particular to do with the JPY moves against the USD.
- Current YCC formation is appropriate.
- CPI will undershoot 2% from next fiscal year onwards; cost-push inflation will weaken after the new year.
- Japan is not in a position where it can achieve 2% price growth next FY; it may take time to achieve 2% inflation.
- CPI growth is due to the rise in import prices driven by commodity inflation and a weak yen.
- It is necessary to achieve 2% inflation target in tandem with wage growth.
- Says the distance to the 2% inflation target has gotten somewhat closer.
- BoJ still doesn't see achieving 2% inflation even in FY24.
- Does not think BoJ should abandon inflation-orientated policy.
- Wages are rising gradually, and expected to rise further next year.
- Will strive to achieve stable and sustainale inflation involving wage growth.
- Expects the Spring wage talks will bring higher wage growth, due to factors including rising price inflation.
- Says base pay is a more important factor for wage growth; without base pay rise of 3%, inflation of 2% cannot be achieved.
- Says the pass-through from rising import prices is necessary and favourable, but does not warrant sustainable or stable inflation, unless combined with wage growth.
- Japan's neutral rate depends on the potential growth rate, and that cannot be specified at present.
- Currently, rates are far below the level of neutral.
- BoJ not thinking of interest rate hike, or an exit of easing for the time being.
- Japan's economy is still on recovery path from the pandemic.
- Government's upcoming economic stimulus package can push down inflation, with electricity and gas subsidies, and a boost to economic growth.
- Hard to tell how much the government stimulus package will affect currencies.
- Slowdown in gloval economy will weigh on Japanese exports and industrial output.
- Sees Japan's economy continuing to grow despite the slowdown in overseas economies.
- Will not hesitate to ease monpol further if needed.
- Appropriate to continue monetary easing to support the economy, for the time being.
28 Oct 2022 - 07:34- Important- Source: Newswires
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