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