Further comments by BOJ deputy governor nominee Wakatabe
- Says that is is true that he expressed concerns about the planned tax hike
- Tax policy is the preserve of the government
- 2014 sales tax hike hurt the economy and pushed inflation further down
- The sales tax hike in 2014 delayed progress towards inflation target
- Expects more improvement in the jobless rate
- Will be close to full employment when inflation nears 2%
- No need to add the unemployment rate to the BOJ's target
- Theoretically no limit to what BOJ can do to ease, practically there could be limits depending on time frame to reach inflation target
- Assessing to what degree an increase in monetary base could affect inflation expectations will be key
- One factor in determining whether more easing is needed is feasibility of BOJ's baseline scenario that 2% inflation target will be met in fiscal year 2019
- Will mull over various options if the BOJ were to ease further
- BOJ needs to make data, not date-dependent decisions
- BOJ current policy is in the right direction and is producing results
He's already proving himself to be the true dove that he is - and if anything a lot more dovish than Kuroda himself.
Wakatabe appears to be erring to the more cautious side and looks to be the case that he wants further easing - just in case - the BOJ is unable to achieve the inflation target projected for fiscal year 2019.
At the moment, economists are not expecting the BOJ to reach those targets any time soon - and if anything they see the BOJ only able to start scaling back on stimulus later than 2019. Here is a recent survey conducted by Bloomberg on the matter.
