February 19, 2025 at 01:33AM
Bank of Japan policy board member Takata speaking.
Japan’s real interest rates remain deeply negative, no change to accommodative monetary environment.
Must adjust degree of monetary support further if economy moves in line with BoJ’s forecasts.
BoJ must gradually shift policy, even after January’s rate hike, to avoid upside price risks from materialising.
BoJ also needs to take a cautious approach in shifting policy due to uncertainty over U.S. economic outlook, difficulty of gauging neutral rate level.
Indicating set neutral rate level could be taken by markets as forward guidance, may cause challenges in terms of policy flexibility.
Firms are maintaining a bullish investment stance
Conumption is rising moderately as a trend
Long-term inflation expectations are rising steadily
Expect firms to deliver solid wage rises in this year’s wage talks
Expect inflation to approach the BoJ’s target, driven by domestic factors
Must be mindful of the risk that inflation may accelerate more than expected due to the weak yen and bumper pay hikes
Hopeful Japan will progress toward durable achievement of the BOJ’s
price target from fiscal 2025 onward due to solid wage gains,
home-made inflationary pressure
Uncertainties remain
over the US economy
The yen is aging a few points on Takata’s comments
This article was written by Eamonn Sheridan at www.forexlive.com.
