The member of the Bank of the Bank of Japan (BOJ), Hajime Takata, declared Thursday that Japan is close to reaching the price objective of the Boj, but has not yet achieved it completely, so it needs to maintain a accommodating monetary policy.
Key quotes
“You can’t say preconception how long the box could wait before uploading the rates.”
“I want to examine the developments, including US inflation, Fed movements, from now on to summer.”
“It is difficult to determine the neutral level of interest of Japan, guide politics with a specific estimate of the neutral rate in mind.”
“Japan is close to achieving the price objective of the BOJ, but it has not yet achieved it completely, so it needs to maintain a accommodating monetary policy.”
“You cannot say now with any pre -established idea, when asked about the possibility of another raised rise for the end of the year.”
“He will respond by observing market movements for each maturity area, balance between supply and demand, when asked about the operations in the Boj bond market, reduction plans.”
“The Boj Tankan showed unchanged the moderate upward trend in capital investment.”
“The uncertainty about US tariffs persists, some companies may not have yet incorporated the impact due to lack of clarity on commercial perspectives.”
“The internal factors show that Japan’s economy advances towards the complete achievement of the Boj pricing objective, but is under great pressure due to external factors.”
“It is difficult to predict exactly when the Boj pricing objective will be completely achieved until the impact of US tariffs is clarified.”
Market reaction
When writing, the USD/JPY is quoting 0.09% down in the day in 143.55.
BANCO DE JAPAN – FREQUENTLY QUESTIONS
The Bank of Japan (BOJ) is the Japanese Central Bank, which sets the country’s monetary policy. Its mandate is to issue tickets and carry out monetary and foreign exchange control to guarantee the stability of prices, which means an inflation objective around 2%.
The Bank of Japan has embarked on an ultralaxa monetary policy since 2013 in order to stimulate the economy and feed inflation in the middle of a low inflation environment. The bank’s policy is based on the Quantitative and Qualitative Easing (QQE), or ticket printing to buy assets such as state or business bonds to provide liquidity. In 2016, the Bank redoubled its strategy and relaxed even more policy by introducing negative interest rates and then directly controlling the performance of its state bonds to 10 years.
The massive stimulus of the Bank of Japan has caused the depreciation of the Yen in front of its main monetary peers. This process has been more recently exacerbated due to a growing divergence of policies between the Bank of Japan and other main central banks, which have chosen to abruptly increase interest rates to combat inflation levels that have been in historical maximums. Japan Bank’s policy to maintain low types has caused an increase in differential with other currencies, dragging the value of YEN.
The weakness of the YEN and the rebound in world energy prices have caused an increase in Japanese inflation, which has exceeded the 2% objective set by the Bank of Japan. Even so, the Bank of Japan judges that the sustainable and stable achievement of the 2%objective is not yet glimpsed, so an abrupt change of current monetary policy seems unlikely.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
