Bank of Japan Governor Ueda is appearing in the Japanese parliament:
- Japanese economy modestly recovering despite some weakness seen
- Corporate profits are improving, with business sentiment solid
- As slowdown in overseas economy pressuring corporate profits, pace of economic growth expected to slow down
- Import prices pushing up inflation are expected to wane
- Uncertainties over overseas trade policies and economic, price situations remain extremely high
- Will continue to raise interest rates if economy, price move in line with forecasts
- Will conduct monetary policy appropriately depending on price, economic developments to achieve 2% target in a stable and sustainable manner
- Important to make judgment without any preset ideas
- Have said in outlook report that our baseline scenario could change significantly
- Will closely communicate with the government
- No preset plan for rate hikes, will raise interest rates only if economy, prices turn up again, outlooks likely to be realised
- Will review Bond taper plans at next policy meeting taking into account opinions of bond market participants
- Aware of market view some investors’ appetite for super-long JGBs have declined
- From long-term perspective, domestic investors remain key buyers of super-long JGBs
- Moves of short, medium-term JGB yields tend to have bigger impact on economy than those of super-long yields
- Volatility in super-long yields could affect short-, medium-term yields so watching market developments and their impact on economy closely
- Japan's underlying inflation remains slightly below Bank of Japan 2% target
- Expect cost-push price pressures, such as rising rice prices, to dissipate
- Underlying inflation likely to gradually accelerate after a brief period of stagnation
That final comment above is significant ... Ueda wants to see the economy and price turn up again ... this is a bit of a change and is yen negative.
