Bank of Japan (BoJ) Board member Toyoaki Nakamura is back on the wires on Thursday, noting that the “July policy decision wasn't part of any exit from ultra-loose policy.”
Additional comments
I wasn't against making YCC flexible, opposition was about timing.
Don't think July policy move is causing any market turmoil.
Japan's inflation isn't demand driven yet, which is why output gap remains in negative territory.
Japan's economic recovery required for BoJ to consider ending negative rate policy.
Decision on when to end negative rate policy will likely be made looking carefully at economic developments.
If Japan's economy achieves sustained recovery, we won't need ycc but unfortunately Japan's deflationary mindset has not be eradicated yet.
When there is feeling Japan's deflationary mindset is dispelled, we can get rid of YCC but now is not the time.
FX isn't target of monetary policy.
FX moves have big impact on prices.
BoJ will closely watch impact of Yen moves on economy, prices.
FX isn't driven by interest rate differentials alone.
Weak Yen benefits exports and inbound tourism, but is negative for domestic demand-driven firms and households.
Personally don't see need to stick to January-March period in judging whether Japan's economy ready for BoJ policy tweak.
What's most important is to see whether Japan firms' growth expectations heightening.
Will likely take time determining whether conditions are rife for BoJ to normalize monetary policy.
If unit labour costs rise more and replaces import price gains as key driver of inflation, that can be described as demand-driven inflation and likely prove sustainable.
Want to look at various data, including monthly wage survey and govt's quarterly business survey, to determine whether firms have succeeded in creating business model allowing for sustained wage growth.
Separately, Japan’s NHK broadcaster cited that Japan’s Prime Minister (PM) Fumio Kishida is considering raising the nationwide minimum wage standard to 1,500 yen per hour by the mid-2030s.
Market reaction
USD/JPY was last seen trading at 145.93, losing 0.20% 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 stays in positive territory above 1.0850 after US data
EUR/USD clings to modest daily gains above 1.0850 in the second half of the day on Friday. The improving risk mood makes it difficult for the US Dollar to hold its ground after PCE inflation data, helping the pair edge higher ahead of the weekend.
GBP/USD stabilizes above 1.2850 as risk mood improves
GBP/USD maintains recovery momentum and fluctuates above 1.2850 in the American session on Friday. The positive shift seen in risk mood doesn't allow the US Dollar to preserve its strength and supports the pair.
Gold rebounds above $2,380 as US yields stretch lower
Following a quiet European session, Gold gathers bullish momentum and trades decisively higher on the day above $2,380. The benchmark 10-year US Treasury bond yield loses more than 1% on the day after US PCE inflation data, fuelling XAU/USD's upside.
Avalanche price sets for a rally following retest of key support level
Avalanche (AVAX) price bounced off the $26.34 support level to trade at $27.95 as of Friday. Growing on-chain development activity indicates a potential bullish move in the coming days.
The election, Trump's Dollar policy, and the future of the Yen
After an assassination attempt on former President Donald Trump and drop out of President Biden, Kamala Harris has been endorsed as the Democratic candidate to compete against Trump in the upcoming November US presidential election.