The full text is here: Economic Activity, Prices, and Monetary Policy in Japan
These are not dovish remarks, yen moving a little stronger.
- Inflation on track or moving somewhat stronger than expected
- Upward inflation risk had been elevated until March
- Japan’s wage momentum sufficiently heightening
- Consumer inflation data for April, May overshooting expectations
- While downward pressure exists, risk of Japan’s wage, price-setting behaviour reverting to low growth environment is small
- US tariff likely to weigh on Japan’s economy, prices but inflation to Tay near 2% until fiscal 2027
- Market-based services inflation exceeding 2%, rent and public service costs also gradually rising
- Rise in fresh food prices can no longer be described as temporary, must watch moves carefully
- Medium-, long-term inflation expectations heightening gradually
- Household, corporate inflation expectations are already around 2%
- Must be vigilant to risk of Japan’s inflation expectations overshooting further
- My basic stance is BOJ must raise rate in timely, appropriate fashion without being too quick or too late
- Don’t see 0.5% as barrier for BoJ rate hikes
- JGB market function has improved somewhat but remains low
- Voted against June decision to slow pace of bond buying taper next year on view BOJ should normalise bond holdings balance as soon as possible
- Must steadily normalise balance sheet, even though it may take time.
