Bank of Japan Governor Kazuo Ueda made some comments this Friday, stating that the Japanese economy is recovering moderately and is likely to continue doing so.
Capital investment increases moderately.
Japan’s trend inflation is likely to gradually accelerate towards 2% during fiscal 2025.
The impact of market movements, including currency movements, on the economy and prices should be closely monitored.
We will patiently maintain the expansive policy.
We cannot yet affirm with conviction that our price objective will be met in a stable and sustainable manner.
It is important to analyze whether Japan sees a positive wage-inflation cycle.
It will take some time, but cost-driven inflationary pressure is likely to dissipate.
There remains much uncertainty about whether Japan can see a positive inflation and wage cycle.
The Government and the BoJ share the opinion on the desirable direction of the economy and inflation.
Let’s not expect the 10-year JGB yield to rise sharply above our 1% benchmark even if yields come under upward pressure.
We will consider ending yield curve control and the negative rate if we can expect inflation to stably and sustainably reach the price target.
In what order and in what part we will change the monetary policy will depend on the economic evolution, prices and markets at that time.
Source: Fx Street
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