Bank of Japan (BoJ) Deputy Governor Shinichi Uchida expressed his view on the bank’s interest rate outlook, exchange value and the current market volatility.
Key quotes
Our interest rate path will obviously change if, as a result of market volatility, our economic forecasts, view on risks and likelihood of achieving our projection change.
Japan is not in an environment where we would be behind the curve unless we hike rates at set pace.
We won't hike rates when markets are unstable.
Personally believe US economy can achieve soft landing.
See no big change to Japan, US, economic fundamentals so market reaction to single US data appears too big.
Recent market moves are extremely volatile so watching impact of their moves on economy, prices with extreme vigilance, will respond appropriately in guiding policy.
We must maintain current degree of monetary easing for the time being.
Japan's real interest rate very low, monetary conditions very accomodative.
If economy, prices move in line with projections, it is appropriate to adjust degree of monetary easing.
Degree, speed of FX moves' impact on prices bigger than in past.
Weak yen and subsequent rise in import costs pose upside risks to inflation.
Short-term interest rate, at 0.25%, is still very low on real basis, so we continue to support economy with very loose policy.
Given rapid market volatility, we need to maintain current level of monetary easing.
Stock market volatility affects corporate activity, consumption so is important factor in guiding monetary policy.
Reversal of weak Yen means risk of inflation overshoot has diminished, which would affect our policy.
Expect Japan's consumption to stay solid.
Changes seen in Japan's labor market are structural and irreversable.
It is true over 10 years of massive monetary easing has caused various side-effects.
Our scheduled tapering of bond buying likely won't cause major changes in degree of monetary easing.
Short-term rates have bigger effect of stimulating economy than long-term rates.
Market reaction
The Japanese Yen sees a fresh bout of selling following these dovish remarks from the BoJ official, as USD/JPY storms through the roof to retest 147.50. The pair is currently trading at 146.82, still up 1.75% on the day.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD accelerates losses to 1.0930 on stronger Dollar
The US Dollar's recovery regains extra impulse sending the US Dollar Index to fresh highs and relegating EUR/USD to navigate the area of daily troughs around 1.0930 in the latter part of Friday's session.
GBP/USD plummets to four-week lows near 1.2850
The US Dollar's rebound keep gathering steam and now sends GBP/USD to the area of multi-week lows in the 1.2850 region amid the broad-based pullback in the risk-associated universe.
Gold trades on the back foot, flirts with $3,000
Gold prices are accelerating their daily decline, steadily approaching the critical $3,000 per troy ounce mark as the Greenback's rebound gains extra momentum and US yields tighten their retracement.
Can Maker break $1,450 hurdle as whales launch buying spree?
Maker holds steadily above $1,250 support as a whale scoops $1.21 million worth of MKR. Addresses with a 100k to 1 million MKR balance now account for 24.27% of Maker’s total supply. Maker battles a bear flag pattern as bulls gather for an epic weekend move.
Strategic implications of “Liberation Day”
Liberation Day in the United States came with extremely protectionist and inward-looking tariff policy aimed at just about all U.S. trading partners. In this report, we outline some of the more strategic implications of Liberation Day and developments we will be paying close attention to going forward.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.