Bank of Japan (BOJ) Governor Kuroda gave a sppech in Japan on Monday afternoon (Mike had the headlines here). The Wall Street Journal had a recap of it overnight, focusing on an expected ‘speed bump’ in Japanese inflation:
- Private economists expect that Japanese inflation (as measured by the BOJ’s preferred gauge, the core CPI) will slow from here as a boost from the yen’s past weakness has run its course, and that this means the BOJ will ease further in order to to meet its 2% inflation target
However, says the Journal, Kuroda suggested that was not the case:
- The core index is “expected to slow to around 1%” through the summer before accelerating again
- He reiterated his mantra that the core inflation will stay “around 1.25%” for some time
“By making it clear that ’1%’ would be within the definition of ‘around 1.25%,’ Mr. Kuroda signaled that he won’t do anything” even if the index moves closer to the 1% mark, said Yoshimasa Maruyama, a senior policy analyst at Itochu Corp.
The article is ungated, if you want to read further.
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Expectations of further easing from the BOJ have been scaled back, and this latest from Kuroda further nailing that door shut (for the time being, at least).
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Oh, and one more thing … given it’s a dip in inflation we’re looking for I would have called it an inflation pot hole, not a speed bump (if we’re sticking with the road metaphor).
