BoJ’s Ueda: When achievement of 2% inflation in sight, we will seek exit from easy policy

Dhwani Mehta FXStreet

Bank of Japan (BoJ) Governor Kazuo Ueda said in his parliamentary speech on Tuesday, “when achievement of 2% inflation stably and sustainably in sight, we will seek an exit from negative rates, YCC and other large scale monetary easing steps.”

Additional quotes

In what order we phase out various monetary easing tools will depend on economic, price, financial conditions at the time.

It is possible to control short-term rates at appropriate level by paying interest on reserves parked with BoJ.

If inflation accelerates and warrants monetary tightening, it is possible to do so by raising rates without scaling back BoJ’s bond holdings.

There are various ways to push short-term rates to positive territory.

One way would be to apply positive interest to reserves parked with BoJ, which would push up overnight call rate slightly below that level.

Market reaction

USD/JPY is holding the latest uptick near 147.40, as the fresh comments from BoJ Governor Ueda offer little comfort to the Japanese Yen. The pair is up 0.33% on the day.

Japanese Yen price today

The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the weakest against the Euro.

	USD	EUR	GBP	CAD	AUD	JPY	NZD	CHF
USD		-0.05%	0.02%	-0.02%	0.02%	0.46%	-0.01%	0.00%
EUR	0.05%		0.05%	0.03%	0.06%	0.50%	0.02%	0.05%
GBP	-0.01%	-0.06%		-0.03%	0.02%	0.44%	-0.01%	-0.01%
CAD	0.02%	-0.03%	0.03%		0.04%	0.47%	0.00%	0.02%
AUD	-0.02%	-0.07%	-0.01%	-0.04%		0.42%	-0.04%	-0.02%
JPY	-0.47%	-0.50%	-0.45%	-0.48%	-0.43%		-0.46%	-0.45%
NZD	0.01%	-0.03%	0.01%	0.00%	0.04%	0.47%		0.02%
CHF	-0.01%	-0.03%	0.01%	-0.03%	0.02%	0.45%	-0.01%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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