Bank of Japan (BOJ) Governor Haruhiko Kuroda explicitly dismisses expectations of monetary policy tightening in the coming months.
Key quotes
Japan is absolutely not in situation that warrants tightening monetary policy.
Our biggest priority is to support Japan’s economy by continuing with powerful monetary easing.
Japan does not face trade-off between economic, price stability and so can continue to stimulate demand with monetary policy
Wages and prices must mutually rise in order for Japan’s inflation to stably hit 2%.
BOJ will be unwavering in its stance of maintaining monetary easing to ensure recent rise in inflation expectations lead to sustained price rises.
Recovery in Japan’s consumption, capex is weaker than in the US, euro-zone economies.
BOJ must cushion blow from falling real income, driven by rising raw material costs, on households, firms by maintaining easy monetary policy.
Weak yen pushes up both export, import prices so its impact on terms of trade is roughly neutral.
Important for Japan’s consumer inflation to achieve 2% on average, not temporarily.
Amount of BOJ’s bond buying has not increased much despite BOJ’s recent decision to offer unlimited buying of 10-year JGBs at 0.25%.
Fed's policy response will likely contribute to stable global growth, though must be mindful of risks such as possible stock market adjustment, capital outflows from emerging markets.
Must maintain monetary easing to prolong tight job market, prod firms to match wage increase with pace of price rise.
Japan households are becoming more accepting to price rises, which is an important change in terms of achieving BOJ’s price goal.
Households' forced savings, accumulated during covid pandemic, may have made them more accepting to price rises.
Market reaction
USD/JPY is finding a floor near 130.20 on BOJ Chief Kuroda’s dovish comments. The spot is trading at 130.59, down 0.21% on the day.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD remains offered in the low-1.0900s
The generalised selling pressure continues to weigh on the risk complex, pushing EUR/USD back toward the 1.0900 support level amid a growing risk-off mood, as traders assess President Trump’s reciprocal tariffs and their impact on economic activity.
GBP/USD retreats further and breaks below 1.2800
The US Dollar is picking up extra pace and flirting with daily highs, sending GBP/USD to multi-week lows near 1.2770 in a context where safe-haven demand continues to dictate sentiment amid the chaos of US tariffs.
Gold recedes to four-week lows near $2,950
The persistent selling pressure is now dragging Gold prices to the area of fresh multi-week troughs near the $2,950 mark per troy ounce, always amid the continuation of the recovery in the US Dollar, highr US yields across the curve and unabated tariff tensions.
US stock market suddenly reverses higher after rumor of 90-day tariff pause before sinking again Premium
NASDAQ sinks 4% before shooting higher on tariff pause rumor. CNBC says White House unaware of tariff pause rumor. S&P 500 sinks to January 2024 level. Bank of America cuts its year-end target for S&P 500 by 16%.
Strategic implications of “Liberation Day”
Liberation Day in the United States came with extremely protectionist and inward-looking tariff policy aimed at just about all U.S. trading partners. In this report, we outline some of the more strategic implications of Liberation Day and developments we will be paying close attention to going forward.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.