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Bank of Japan (BoJ) Governor Kazuo Ueda said on Tuesday that there is a chance that the Japanese central bank will raise interest rates at its July meeting, depending on the economic, price and financial data and information available at that time.
Key quotes
There is a moderate recovery in the Japanese economy.
A gradual rise in price trend is expected.
Monitor the impact of foreign currencies on the economy and inflation.
Data released since April are roughly in line with the Bank of Japan’s estimates.
– Follow an appropriate policy consistent with economic conditions
To adjust the degree of facilitation as needed using modifiers.
He sees economic data in line with expectations.
He sees uncertainty in the expected increase in prices.
JGB returns are determined by the market.
It aims to enhance market leverage by limiting bond buying.
It is difficult to determine the size of the reduction in bond purchasing now.
Seeks predictability in bond purchases.
He sees a possible rate increase in July depending on the data.
Raising interest rates and buying bonds are two separate things.
As we gradually reduce bond purchases, we will of course aim to reduce the size of our balance sheet relative to GDP.
The primary purpose of our bond reduction will be to allow yields to move more freely driven by market forces, and to revive market performance.
The Japanese economy is likely to see more pronounced signs of a positive wage inflation cycle as nominal wages rise.
We must be alert to the impact of a weak yen and import price movements on the economy.
Market reaction
At the time of writing, USD/JPY was trading down 0.06% on the day to trade at 157.63.
