Bank of Japan governor Kuroda speaking in Tokyo 7 Dec 2017
- 2% inflation target is a global standard
- The target contributes to long-term FX stability
- Government's declaration of end to deflation will be a big step forward for the Japanese economy
- BOJ will guide policy appropriately solely on achieving the price target
- It is clear that low interest rates have contributed to economic growth
- Powerful monetary easing isn't disrupting banking system
- Reversal rate is one academic theory that is a useful reference for policy
- BOJ is not only watching the economy and prices, but also impact on financial conditions and the banking system in guiding monetary policy
- Current shape of the yield curve is appropriate relative to Japan's economy, prices and financial conditions
- But shape of the curve could change depending on future developments
- BOJ will consider what is the best level of short, long-term rate targets based on those developments
- Doesn't see any excessive moves in financial markets now, will continue to monitor markets
- ETF buying still necessary to hit 2% inflation target
USD/JPY has been inching up a little on the day, backed by improved sentiment after yesterday's fall to 112.00. The pair is currently trading at 112.43, and as Greg mentioned is running into some resistance levels here.
The Nikkei is up 1.15% today so far after yesterday's decline - which was the worst since March.
This already somewhat feels like statements coming from your typical BOJ meeting. It only increases the likelihood the BOJ will not make any changes to its policy later in the month in its 21 December meeting.
