Bank of Japan policy board member Takehiro Sato.

Speaking at a meeting with business leaders

  • Japan economy likely to avert recession
  • Global economic slowdown likely to continue for time being
  • Companies have been cautious on capex, this trend may strengthen due to global market developments
  • Negative rate policy may have dampened household sentiment
  • QQE was 'shock' therapy, personally did not expect it to last for too long
  • Negative rate policy may have monetary tightening, not easing effect on economy

  • BOJ must take balanced approach in achieving its mandate of price stability and financial stability, but negative rate policy may hurt that balance
  • BOJ must modify its current framework to one that is more suitable for long-term battle vs deflation
  • Desirable to aim to achieve price target as a medium to long term goal
  • Expect road towards achieving 2% inflation target will be long


  • Excessive interest rate declines could undermine people's confidence via negative effects on corporate finance
  • Sceptical of idea that negative rate policy will stimulate capex
  • Opinions divided on economic effects of negative rate policy, which is fuelling worries among people over this policy
  • Believe it's unnecessary to persist in hitting 2 pct inflation target at all costs
  • People aren't hoping for inflation that is not accompanied by income growth
  • We have learned from experience that if inflation rises before income does, consumer sentiment worsens and hurts consumption

That comment I've highlighted .... bit of a biggie that one. The yen is strengthening on it as its being taken as evidence that further BOJ action may be further away than many think

Sato still nattering away:

  • Sees JGB market vulnerability similar to before 2003 shock