BOJ’s Kataoka: Lowering short, long-term rates needed – MNI


The Bank of Japan (BOJ) must lower both short and long-term policy interest rates via ramping up purchases of Japanese government bonds (JGBs), the central bank’s board member Goushi Kataoka told business leaders in Maebashi City via an online meeting, per MNI.

Key quotes

“As for commitment, in order to prevent Japan's economy from falling into deflation, further policy coordination of both fiscal and monetary policy is needed.”

“It was necessary for the BOJ to strengthen its policy commitment by relating the forward guidance for policy rates to price targets.”

“Hard to foresee inflation approaching 2% given pace of economic recovery will be modest.”

“BOJ will take additional easing steps without hesitation with an eye on pandemic impact, including re-extending credit programmes.”

“Expect Japan's price growth to stagnate for a prolonged period of time.”

“Personally, believe the BOJ must strengthen easing via YCC, policy commitment.”

“At the March review the BOJ must examine and explain its policy strategy taking into account a lack of prospect for achieving its price target.” 

USD/JPY reaction

USD/JPY was last seen trading at 106.80, up 0.14% on the day, heading back towards 107.00 amid the risk-on market profile.

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