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Bank
of Japan board member Asahi Noguchi spoke to business leaders in
Nagasaki. Saying he sees a need for the Bank to maintain loose
monetary policy stance given its going to take time to exit
deflation:
“It
will likely take considerable time for a mindset that is consistent
with the 2% price stability target to be established among the
society,”
“Until
then, I believe it is most important to continue to patiently
maintain accommodative financial conditions.”
Noguchi
was conveying a very similar message to Prime Minister Ishiba on
Wednesday:
“I
don’t believe we are in an environment that requires an additional
rate increase”
So that we don’t conclude that the Bank of Japan is subject to political pressure,
Japan’s Chief Cabinet Secretary Hayashi weighed in by saying PM
Ishiba didn’t request any specific monetary
policy of BOJ governor Ueda when they met on Wednesday. Huh. I imagine Ueda got to his
exalted position by managing to read between the lines over his
career though. And, lest you think I am singling out the BoJ as being ’emotionally intelligent’ with regards to politics, imagine if the Fed cut rates by 50bp going into an election! Oh, wait …
USD/JPY
carried on its Wednesday rally to highs just over 147.20 before
falling back under 147.00. Elsewhere across major FX the USD added
points, although ranges were subdued. US nonfarm payroll data are due
on Friday and will soon come into focus.
While
BOJ and yen developments are a focus, so too are Chinese markets and
stimulus. China remains on holiday, but Hong Kong is trading. The
benchmark Hang Seng index pulled back today. As I post is off around
4% on the day. Which barely scratches the surface of its epic rise
since stimulus announcements last week.
This article was written by Eamonn Sheridan at www.forexlive.com.
