The governor of the Bank of Japan, Kazuo Ueda, declared in Friday that American tariffs will probably exert downward pressure on Japan and global economies.
Outstanding comments
American tariffs will probably exert downward pressure on Japan and global economies.
It is difficult to say now how American tariffs will affect price movements in Japan.
We will monitor closely the impact of American tariffs in Japan, as well as economic and pricing developments abroad by deciding monetary policy.
We will examine the data, including those of the hearings, available at the time of each policy meeting to evaluate the impact of American tariffs on the economy and prices of Japan.
We will guide the monetary policy appropriately from the perspective of sustainably achieved the inflation objective of 2%.
When the external environment changes dramatically, our growth and prices forecasts will also change, so we will guide monetary policy properly.
Market reaction
At the time of publication, the USD/JPY torque rises 0.17% in the day, quoting in 146.33.
Japan Faqs Bank
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.
