- Expect Japan to make further progress towards 2% inflation in a steady, sustainable manner
- Uncertainty about the economy, price outlook is high
- They must avoid returning to a deflationary or low inflation environment
- As Japan moves towards a sustainable performance of 2% inflation, the BOJ will support the economy by keeping rates below the neutral rate.
- But as economic, price developments continue to improve, BOJ must raise rates accordingly
- Leaving an accommodation policy for too long could result in a sharp rise in interest rates
- That in turn will be negative for lasting economic growth
- It would be desirable for the BOJ to steer policy so that it does not reach zero again
Just a few comments there by Ueda but he doesn't give anything away about the January decision this time. But his comments last week here he will definitely still be coming into the new year. So, keep that in mind when accounting for the BOJ when markets come back in the saddle in January.
This article was written by Justin Low at www.forexlive.com.
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