Bank of Japan board member Sata speaking in Kushiro 2 June
- inappropriate to tie mon pol decisions to fiscal policy moves
- I am clearly opposed to further lowering of the negative rate
- sustainable finances needed for sustainable Japan growth
- credit rating downgrade unlikely to lead to spike in long-term interest rates, which are pushed down by BOJ's massive JGB purchases
- if sales tax hike delay leads to credit rating downgrade it may raise cost of foreign funding, have "significant" impact on profits of Japanese fin institutions
- 2% inflation target in 2 years is too high a target
- sales tax hike delay is likely to push up GDP growth short-term
- will incorporate impact of sales tax hike delay in BOJ's next review of GDP and CPI forecasts in July
USDJPY unfazed at 109.15 by the neg rate comment .
Eamonn had earlier Sato comments here.
