BoJ’s Takata: If the economy and prices move in line with our forecast, we will adjust the policy rate in stages

Bank of Japan (BoJ) Board member Hajime Takata is back in the media in Europe early on Thursday, noting that “if the economy and prices move in line with our forecast, we will adjust the policy rate in several stages.”

Highlighted statements

I don’t have a specific image in mind when I say that we need to spend “enough time” to examine the economy and price developments.

The current market moves are the second round of volatility we saw in early August, reflecting concerns about the U.S. economic outlook.

Our basic stance is to adjust the degree of monetary support if the economy and prices are on track, but that is not without some qualifications.

If markets are volatile, we need to assess the impact of movements on the economy and prices when setting policy.

Based on our audiences, we expect further price increases in October, even though that was when the Yen was weakening.

We have seen some changes in FX, market movements, so we need to take a fresh look at the impact on the economy and prices.

We will not respond directly to FX movements, but we are aware that they could impact the economy, prices and risks.

We have no preconceived notion about the pace of rate hikes, or whether we will raise rates multiple times.

We have no choice but to examine at every policy meeting how market movements affect corporate balance sheets, profits and risks to the economy.

Market reaction

At the time of writing, USD/JPY is holding its retreat near 143.35, losing 0.26% on the day. The BoJ official leaves the door ajar for further interest rate hikes, putting a fresh bid under the Japanese Yen.