Bank of Japan Governor Governor Kuroda speaking at a meeting held by the Naigai Josei Chosa Kai (Research Institute of Japan) in Tokyo
- Slowdown in emerging economies already affecting Japan's exports, output
- Japan's economic fundamentals remain solid
- If growth in emerging economies sharply undershoot forecasts or slowdown persists, that may hit Japan's economy more than expected
- Will continue pursuing QQE to ensure easy financial conditions continue
- if companies feel strong concerns on outlook for emerging economies and forgo capex, that may weigh on domestic demand
- Bigger-than-expected pain from emerging markets still a risk, but must be vigilant
- Japan will definitely meet 2% price target as growth exceeds potential growth rate
- Japan inflation may undershoot forecast if firms become wary of raising wages, depending on overseas developments
- It is rare for companies to post record high profits amid declining exports and output
- Strong domestic demand is one reason corporate profits are high
- Rises in capex, wages somewhat slow despite companies' record profits, which shows deflationary mindset not completely dispelled
- Japan has become more resilient to slowing exports and overseas economies
- Low oil prices causing terms of trade to improve, which is pushing up corporate profits
- By maintaining boj's current stimulus programme, japan can achieve 2 pct inflation but must carefully watch risks such as slowdown in emerging economies
- BOJ won't hesitate to adjust policy if needed to achieve 2 pct inflation at earliest date possible
- Weak yen is helping to increase dividends and profits repatriated from overseas
- Slowdown in emerging economies, including china, is most important risk to japan's economic outlook
- China's economic growth likely to heighten from year-end through next year
- Important to note that slowing exports and output are not causing labour demand to fall
- There is uncertainty on how much fiscal stimulus can lift china's economic growth given structural problems such as excess capacity
- You can say that japan is at full employment
- Tight labour market is putting upward pressure on wages
- Its unclear how much an expected china recovery will boost growth in other asian economies given structural changes in china's economy
- Japan may temporarily fall below potential growth rate after 2017 sales tax hike
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... Kuroda is on script, there is nothing here fresh or new or to move the yen anything more than a pip or so ... which is pretty much the minuscule reaction we are seeing. We've heard all this, or something very, very similar from Kuroda before.
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Kuroda is still going ... more:
- Daily and weekly measures of prices for food and other goods are clearly rising
- CPI basket shows price gains are spreading in a sustainable manner
- Output gap expected to improve further due to improving labour market
- Utilisiation of capital and labour will continue to improve and place upward pressure on prices
- Inflation expectations rising over long term
