Bank of Japan (BOJ) board member Seiji Adachi is back on the wires now, via Reuters, speaking on the negative effect of the monetary policy tightening to curb the yen's downfall.
Key quotes
Trying to stem weak yen by tightening monetary policy would squeeze corporate funding.
Downside risks to Japan’s output appear to be heightening but that is offset by improvement in household sentiment.
Degree of next fiscal year's wage hike will be key to whether Japan can pull out of deflation.
If Fed rate hike cools the US economy, there is a risk that could reverse current weak-yen trend.
BOJ must wait until consumer inflation, stripping away fuel and volatile fresh food costs, moves closer to 2% before normalising monetary policy.
Should not have pre-set idea on timing of normalising monetary policy.
Must take into account negative impact on financial institutions' profits when considering whether to ease policy further.
There are both upside, downside risks to Japan’s price outlook.
If firms continue to pass on higher costs to consumers, Japan’s trend consumer inflation may accelerate near 2%.
Market reaction
USD/JPY is off the highs, back to test 130.00 on the above comments. The pair is currently trading at 130.02, down 0.07% on the day. Falling yields are also adding to the weight on the major.