- BOJ keeping monetary conditions accommodative
- Gradually adjusting degree of monetary accommodation
- Japan is seeing inflation in the sense that consumer prices are rising
- But it is up to the government to decide whether Japan is out of deflation
- BOJ does not directly target exchange rate
- Will continue to scrutinise market moves, impact on the economy and prices
- Hard for BOJ to directly influence wages
- Wage dynamics are driven by various factors including those that monetary policy cannot control
The comments go in line with Katayama’s remarks around the same time here. And Katayama herself already gave the answer that “Japan has not fully exited deflation”. That’s a bit of a jibe at the BOJ as the central bank is still trying to work out how they want to angle their next rate hike.
Besides that, Katayama did also chime in to say that the BOJ’s task is to achieve price stability and not to target the exchange rate. And that is something that Himino also reaffirmed above. But I reckon, Katayama’s comment has a double meaning in that she doesn’t want policymakers at the central bank to overstep in raising interest rates to defend the yen currency.
This article was written by Justin Low at investinglive.com.
