On Wednesday, December 25, Bank of Japan (BOJ) Governor Kuroda spoke at the Meeting of Councillors of Nippon Keidanren (Japan Business Federation).

Link to full text: Overcoming Deflation and After (PDF)

Headlines (via Reuters):

  • BOJ will proceed with QQE (Qualitative and Quantitative Easing) to achieve 2% inflation at the earliest possible timing
  • BOJ has pledged to maintain ultra-loose monetary policy until 2% inflation is stably achieved
  • BOJ’s monetary policy is different from that of other central banks in that it focuses on changing public expectations on prices
  • BOJ wants to create a positive cycle in which deflation expectations are eradicated, leading to moderate price rises and higher wages
  • Japan consumer inflation is likely to slightly exceed 1% early next year, which will help heighten inflation expectations
  • Improvements in Japan’s economy, market moves, public sentiment are broadening

USD/JPY was unchanged on the headlines of Kuroda’s speech; there was little there of surprise.

(MNI recap)

(Wall Street Journal (gated) recap)

An hour or so before the speech from Kuroda, Japanese Prime Minister Shinzo Abe said he wants to ensure that next year’s sales tax hike does not derail the economy from its recovery path: “Economic (revival) will remain our utmost priority next year”