BOJ deputy governor Nakaso:

  • We intend to achieve the price stability target of 2% at the earliest possible time by steadily pursuing QQE
  • Under QQE Japan appears to finally have embarked on path toward overcoming deflation
  • Strongly hope that the government will continue to implement the growth strategy unwaveringly
  • With supply capacity constraints having surfaced, now is a golden opportunity to address japan’s longstanding challenge of raising growth potential
  • BOJ already has an extensive range of operational instruments to exit from QQE
  • Past BOJ monetary policy lacked strong enough commitment to price stability
  • Exit policies should be designed depending on prevailing economic and inflation situation at the time
  • Premature to discuss the specifics of an exit from QQE at this stage
  • BOJ has no intention of going beyond its mandate of achieving its price target, has no intention to monetise government debt
  • BOJ’s current commitment to achieve 2% in two year horizon does not mean BOJ will end QQE in two years
  • BOJ is committed to continuing with qqe as long as necessary
  • BOJ will adjust policy without hesitation if judged necessary for achieving its price target
  • CPI growth likely to slow temporarily especially through the summer but is likely to accelerate thereafter
  • QQE raises inflation expectations, which provides room for further easing as this helps lower real interest rates
  • U.S., UK and Euro area economies are on recovery trend but their output gaps remain negative
  • Japan’s economy has continued to recover moderately as virtuous cycle among production, income, and expenditure has kept growth momentum intact

BOJ deputy governor Nakaso speaking in Tokyo to a joint luncheon of the American Chamber of Commerce in Japan (ACCJ), European Business Council in Japan (EBC), and Swiss Chamber of Commerce and Industry in Japan (SCCIJ).

Headlines via Reuters

Nakaso on script and yen not doing much on this no new information.