Bank of Japan Governor Ueda:
As we taper bond buying, we will of course be aiming to shrink size
of our balance sheet in ratio to GDP termsBasic purpose of our
bond tapering would be to allow yields to move more freely driven by
market forces, and revive market functioningJapan’s economy will
likely see more clear signs of positive wage-inflation cycle as
nominal wages riseMust be vigilant to
impact of weak yen, import price moves on economy
Corporate price, wage-setting behaviour clearly changing on record
profits, tightening job market
Nominal wages likely to rise ahead and gradually lead to positive
real household income, underpin consumption
Consumption likely
to increase moderately as nominal wage gains accelerate
For now, don’t
expect japan to experience stagflation
Earlier from Ueda:
Bank of Japan Gov Ueda expects strengthening in Japan wage-price cycle – higher inflationBank of Japan Governor Ueda says chance we could raise interest rates at July meeting
Meanwhile, USD/JPY is still moving in a small range only:
This article was written by Eamonn Sheridan at www.forexlive.com.
