BoJ’s Nagakawa: Prospects of sustainably achieving 2% inflation target gradually heightening
Bank of Japan (BoJ) policy board member Junko Nakagawa is back on the wires on Thursday, via Reuters, expressing his take on the Japanese inflation and economic outlook.
Key quotes
Prospects of sustainably achieving 2% inflation target gradually heightening.
Consumption remains weak in both nominal, real, terms which warrants attention.
It will take until autumn and beyond if we were to wait until smaller firms’ wage negotiation outcome.
Will scrutinize whether and how long we should analyze data in deciding policy shift.
When debating ending negative rate, we should also debate fate of other unconventional monetary easing tools in place.
Developments in consumption would be very important factor in deciding when to end negative rates.
Expect wage hikes and prospects of sustained wage gains to underpin consumption.
Don’t necessarily need to wait for all of small, mid-sized firms’ wage talks outcome in deciding when to end negative rates.
It’s important to ensure wages keep rising as a trend, and sustain inflation around 2%.
Have no preset idea in mind on whether to end YCC in tandem with exit from negative rate.
As we always do at our policy meetings, we are likely to assess and discuss what to do with various tools we have in place.
Market reaction
USD/JPY is off the lows but remains 0.53% lower on the day near 148.55, at the time of writing.