BoJ Governor Ueda says that Japan's economy is to gradually pick up in the coming months; says the likelihood of achieving 2% inflation is rising gradually; must carefully watch financial and FX moves alongside the impact on the economy and prices

PRICES

The likelihood of achieving 2% inflation is rising gradually.
BoJ confidence has grown in the achievement in the price target.
"likelihood of achieving inflation target is rising as we confirmed economy is proceeding based on existing price outlook".
Services Prices have increased moderately.
Chance is steadily rising for the achievement of 2% target.
Affirms the presence of virtuous cycle of wages and prices.
Impact of import prices continuing, but has passed its peak.
"first force" (or cost-push inflation) has passed its peak, while the "second force" (virtuous wage-price cycle) is gradually emerging.
It is not necessary that output gap must turn positive and then rise in order to achieve the inflation target.
Some upward factors in services price inflation are temporary, but excluding these factors, BoJ can say it's gradually rising.
"We have come somewhere far from deflation if you define it as a state of negative inflation rate".

WAGE TALKS

Labour unions are asking for higher pay at wage talks.
Have heard encouraging comments from large companies regarding wages - closely watching the outcome of the wage negotiations.
Want to confirm cycle of wages and prices is in place.
The number of firms that have decided to hike wages at this year's Spring wage talks is higher than this time last year.
Uncertainty is still high about how widespread wage hikes will be, although the uncertainty is not as high as last year.
Even if real wages are negative and the outlook is positive, a policy change is possible.
Do not need all small and medium-sized firms to hike wages significantly to allow for policy change.
"We can make some judgements on wages at smaller firms by looking at other economic data hearing from other companies."

POLICY

Reiterates BoJ will not hesitate to take additional easing measures if necessary.
Will examine whether to continue massive monetary easing measures including negative integrate rate policy when BoJ judges the achievement of 2% inflation is in sight.
"Believe we can avoid major policy discontinuity considering current prices and economic outlook".
No change in BoJ stance to carefully examine price trends.
BoJ to examine incoming data at every meeting.
Cannot quantify how much closer BoJ is to exiting negative interest rate policy.
Cannot deny there are side-effects to negative interest rate policy.
Will certainly foresee further rate hikes when exiting negative interest rate policy.
Will end NIRP when BoJ judges the achievement of the inflation target is in sight.
Accommodative conditions will continue for a while.
Will have more data at the April policy meeting compared to March.
Will consider whether to continue buying ETFs when the time comes to exit stimulus policy, and will consider whether to continue ETF buying when achievement of 2% inflation is in sight.
Consideration on whether to continue ETF buying is a separate issue from whether to sell.
Will guide policy to avoid major discontinuity in long-term bond buying before and after policy exit.
2% inflation target should not be changed so easily.
Unsure if long-term review of past policy addresses the necessity of 2% inflation target.
An early rate hike without considering 2% inflation target would have raised risk of return to deflation.
Monetary policy change is possible when there is no update to quarterly outlook.
Do not have a pre-conceived order of policy steps when changing policy.
Cannot say how long easy policy will remain after negative interest rate policy ends.

ECONOMY

Japan's economy is to gradually pick up in the coming months.
Confirms the economy is progressing in line with forecasts.
Moderate growth in consumption will continue after the Spring due to wage hikes.

MARKETS

Must carefully watch financial and FX moves alongside the impact on the economy and prices.
No comment on short-term stock market moves.
Closely watching stock prices and forex market.

EARTHQUAKE

Cannot fully understand the economic impact of the Noto Peninsula Earthquake.