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
