The “need for additional monetary easing is not very high now,” Bank of Japan’s (BOJ) Deputy Governor Masazumi Wakatabe said in a statement on Wednesday.
Key quotes
Widening range around BOJ’s 10-year JGB yield target would be tantamount to a rate hike.
BOJ must leave itself means for easing policy further.
There is a significant downside risk to Japan’s economy.
Moves in services prices are crucial to whether rise in inflation will be sustainable.
Hard to say for how long prices must rise to say rises in inflation are sustainable.
Undesirable to target forex in guiding monetary policy.
Desirable for forex to move reflecting fundamentals.
Sharp forex moves would make it hard for firms to set business plans, so would be undesirable.
It may be hard for cost-push inflation to lead to broader price rises driven by higher wages, inflation expectations.
Market reaction
As of writing, USD/JPY is trading 0.42% higher on the day, at 129.20, underpinned by the rebound in the US dollar and the Treasury yields.