December 25, 2024 at 07:05AM
Expects Japan to further progress towards 2% inflation in stable, sustainable manner
Uncertainty surrounding economy, price outlook is high
Must avoid returning to deflation or low inflation environment
As Japan transitions towards sustained achievement of 2% inflation, BOJ will support the economy by keeping rates below the neutral level
But as economic, price developments continue to improve, BOJ must raise rates accordingly
Leaving accommodative policy for too long could lead to sharp increase in interest rates
That in turn will be negative for long-lasting economic growth
It would be desirable for BOJ to guide policy so that it does not reach zero lower bound again
Just some token remarks there by Ueda but he’s not giving anything away on the January decision this time. But his remarks last week here will definitely still be echoing into the new year. So, do keep that in mind when taking stock of the BOJ when markets get back on the saddle in January.
This article was written by Justin Low at www.forexlive.com.
