BoJ Governor Kuroda says will patiently continue powerful easing, will not hesitate to ease policy further if needed; closely watching financial and FX moves

FX:

BoJ will closely watch financial market moves and their impact on the economy and prices in conjunction with the government.
BoJ is closely coordinating with the government, attentive to JPY weakening effects on the economy and prices.
JPY weakening is one-sided, notes there are speculative moves behind weakening JPY.
Says FX intervention comes under the MoF's jurisdiction, not the BoJ.
Market participants paying attention to interest rate differentials.
Weak JPY is not just due to rate differentials.
Must be vigilant to financial, FX market moves and its impact on economy and prices.
Rapid yen moves makes it difficult for companies to set business plans.
Yen weakness is negative for non-manufacturing copanies and SMEs.
Notes that the JPY is not alone in recent weakening, cites GBP and EUR which are both weaker vs the USD.
Says he will not comment on the FX outlook; monpol not meant to guide FX rates.
JPY weakening vs USD has had almost same impact as dollar-denominated raw material inflation.
Kuroda does not anticipate or expect any government request to tackle JPY weakening.

POLICY STANCE:

Will patiently continue powerful easing, appropriate to continue easing to support the recovery, as output gap remains negative
Will maintain accommodative conditions for companies.

Bond buying is not aimed at monetising government debt.
Widening allowance band for 10yr yield target would hinder monetary easing effects.

INTEREST RATES:

BoJ will not raise rates for the time being, is not considering rate hikes.
Negative rates not having big impact on financial institutions.
BoJ is trying to limit the negative impact of negative rates on banks.
There is no need for the BoJ to abolish negative rates just to follow overseas central banks responding to higher inflation rates.

FORWARD GUIDANCE:

BoJ kept forward guidance unchanged as pandemic impact still in place, but must be vigilant going forward given downside risks to the economy.
BoJ does not rule out possibility of tweaking forward guidance in the future.
But there is no need to adjust guidance presently.
Does not see the need to change forward guidance for about 2-3 years.

INFLATION:

CPI wil undershoot 2% in next fiscal year.
Weak JPY, existing raw material inflation, pushing up consumer prices.
Expects Winter bonuses and next Spring's wage negotiations to bring higher incomes.
BoJ is closely watching the impact of rising prices on households.
Japan prices are likely to overshoot BoJ's previous price outlook for this year, but will most likely undershoot next year.
Wages are rising gradually, reflecting recovery in economy.
Expects wage growth to accelerate beyond next fiscal year due to tight labour supply.
Says it is regretable that "% inflation goal has not be stably and sustainably met.

ECONOMY:

Domestic economy is picking up.
Notes financing conditions for small companies is improving.
Notes GDP growth not yet at pre-pandemic levels, Japan still on path towards recovery.
After he Fed rate hike, BoJ does not see the need to lower Japan's growth projections.