BoJ Governor Ueda: Will patiently maintain the easy policy


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Bank of Japan (BoJ Governor Kazuo Ueda was out with some comments this Friday, saying that Japan's economy is recovering moderately and is likely to keep recovering moderately.

Key Quotes:

  • Capex rising moderately.
  • Japan’s' trend inflation is likely to gradually accelerate toward 2% through fiscal 2025.
  • Must carefully watch the impact of market moves, including FX, on the economy, and prices.
  • Will patiently maintain the easy policy.
  • We cannot say yet with conviction our price target will be stably, sustainably met.
  • Important to scrutinise whether Japan sees a positive wage-inflation cycle.
  • Will take some time but inflationary pressure driven by cost-push factors is likely to dissipate.
  • There is still high uncertainty on whether Japan can see a positive wage-inflation cycle.
  • The government and BoJ share a view on the desirable direction of the economy, inflation.
  • Don't expect the 10-year JGB yield to rise sharply above our 1% reference even if yields come under upward pressure.
  • We will consider ending YCC, negative rate if we can expect inflation to stably, and sustainably hit the price target.
  • In what order, what part we will change policy will depend on economic, price, and market developments at the time.

Market Reaction:

The Japanese Yen (JPY) reacts little to the dovish remarks, though the prevalent US Dollar (USD) selling bias keeps the USD/JPY pair on the defensive near mid-150.00s through the Asian session on Friday.

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