Bank of Japan Governor Ueda speech in Nagoya titled:

  • Japan's Economy and Monetary Policy (full text)

Headlines via Reuters:

  • Japan's economy recovering moderately
  • Japan's economy likely to continue recovering
  • Long-term rates may rise somewhat but what's important is to look at real interest rate that takes into account inflation expectations
  • Even if long-term rates rise, real interest rate will move in negative territory so monetary conditions will be sufficiently accommodative
  • There is uncertainty on whether Japan will see positive cycle of wage and inflation, as we predict
  • We will patiently maintain monetary easing to support economic activity
  • We will continue massive bond buying even under new operation we decided last week
  • We will conduct nimble market operations when interest rate rise, depending on level and speed of moves of long-term rates
  • Even if long-term rates come under upward pressure, don't expect 10-year JGB yield to sharply exceed 1%
  • Under YCC, we need to carefully weigh the effect of the policy in stimulating economy, and the side-effects
  • Uncertainty surrounding our baseline scenario on economy is extremely high, one of which is overseas economic outlook
  • Must keep close eye on impact of rapid fed rate hike on markets, fx moves
  • Need to be vigilant to whether China's recovery momentum could be hampered by property market adjustment
  • Cost-push pressure on inflation likely to gradually dissipate, although it may take more time given recent rises in oil prices
  • Don't expect inflation to move back to around zero like during pre-Covid periods
  • Medium-, long-term inflation expectations heightening moderately, likely affecting firms' corporate wage-, price-setting behaviour
  • Likelihood of Japan achieving 2% inflation target gradually increasing but not in a stage where we can say so with enough certainty
  • Key is whether wages will keep rising and such practice become embedded in society
  • Next year's spring wage negotiation is particularly important, watching development carefully
  • There is uncertainty on whether wage hikes will continue next year
  • Another key factor is whether firms will set prices based on assumption wages will rising

Balanced commentary from Ueda here, but its fair to say there is nothing here to indicate a tightening on policy is imminent.

BoJ Governor Ueda
BoJ Governor Ueda