BoJ Governor Kuroda says will patiently continue powerful easing, will not hesitate to ease policy further if needed; closely watching financial and FX moves
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
Analysis details (07:36)
- Overnight, the BoJ kept policy settings unchanged, as expected, with rates at -0.10% and QQE with yield curve control maintained to target 10yr JGB yields at around 0%, in a unanimous decision
22 Sep 2022 - 07:34- Important- Source: Newswires
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