- Data shows Japan is steadily moving towards achieving 2% inflation target
- That means need for policy adjustment is heightening more than ever
- Economy, prices still face downside risks but upside risks have become more important
- Current high inflation is probably due to a major shift in firms' price and wage-setting behaviour
- Rigidity of services prices is gradually weakening, likely to continue
- The key would be whether this trend would expand to smaller and medium-sized firms
The comments here are slightly hawkish at the balance especially considering that Noguchi is typically one of the more dovish members. Is there a change afoot at the BOJ after the latest dissents by Takata and Tamura? It will be interesting to keep monitoring these remarks in the next few weeks.
