From the Bank of Japan, their Summary of Opinions at the Monetary Policy Meeting on October 27 and 28, 2022
Headlines via Reuters:
- Japan's consumer inflation is likely to accelerate as firms pass on higher costs
- Japan's inflation likely to remain fairly high as there are signs service prices starting to rise
- Consumer inflation likely to slow back below 2% next fiscal year due to impact of slowing global growth
- Companies maybe shifting away from their business practices that were based on the assumption prices won't rise much
- Cannot rule out chance prices will sharply overshoot forecasts
- Sustained, steady wage gains crucial for japan to achieve boj's price target
- Inflation may overshoot expectations but not fully convinced such price rises would be sustainable
- There are signs effect of boj's monetary easing heightening as long-term inflation expectations heighten moderately, push down real interest rates
- Rise in nominal wages crucial to stably achieve boj's 2% price target
- Must be vigilant to impact of tightening of global financial conditions
- Forex levels are determined by fundamentals
I pointed out at the time of the meeting (only a couple of weeks ago) that there was a change in tone from the Bank of Japan on their inflation comments. I also said a change in policy is not imminent, but there are signs one is coming. A loosening of yield curve control is likely to be a first step. The question is one of timing. Maybe we have to wait until Kuroda's term finished in March next year.
USD/JPY update (weekly candles):
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Separately, from Japan's MoF daily intervention data for the July to September quarter, says no stealth intervention was conducted. Yeah, right ... this is July to September , not since. October may be a different story.
