BoJ summary of opinions: BoJ must maintain current monetary easing until inflation stably exceeds 2%

The Bank of Japan's September meeting's summary of opinions states that Japan's core consumer inflation is likely to accelerate toward the year-end with a narrow pace of increase thereafter.

Key notes

Expect wide range of goods to see price rises ahead.
Challenges remain to achieve boj's 2% inflation target as yet to confirm japan will see sustained wage rises.
We must be humble, carefully scrutinise without any preset idea risk japan's inflation may sharply overshoot expectations including via fx moves.
We must scrutinise wage moves, mechanism behind japan's price moves as existing indicators swayed largely by import price moves.
There is chance japan will see high wage growth given tight labour market.
Pandemic-relief programme ought to be phased out as japan only half-way in seeing end to pandemic
BoJ must maintain easy policy as output gap remains negative, even though there is significant risk inflation may overshoot expectations.
BoJ must maintain current monetary easing until inflation stably exceeds 2%, driven by rise in trend such as services prices.
No immediate need to change monetary policy guidance now as we are in a phase where close scrutiny needed on whether japan will see positive cycle of wage, prices.
Some point to interest rate divergence as factors driving yen declines.
Desirable to maintain current foward guidance with dovish bias as impact of pandemic uncertain, inflation likely to slow next fiscal year and onward
When right timing comes, important to have appropriate communication with market on exit strategy from easy policy.

USD/JPY under pressure

Meanwhile, financial markets have been in turmoil which has been playing into the hands of the US dollar. With that being said, bears are moving into USD/JPY as follows:

144.60/70 is the support structure and a close below here on an hourly basis could be significant and open the way for a run on liquidity below 144 the figure.

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