BOJ PRESS CONFERENCE: BoJ Governor Ueda says Japan's economy is recovering moderately, albeit with some weakness

MIDDLE EAST

• Need to pay attention to further developments.
• Global markets are volatile, crude jumped significantly after rising tensions.
• Important to watch impact of Middle East development on domestic economy.
• Will check to what extent surging oil prices would affect the economy.
• Before the war, conflict showed solid business and household activity.
• Slight majority of Board Members had the view that upward pressure on prices was higher given the war in the Middle East. 
• Personally, Ueda wants more time to decide whether Middle East situation has an upward or downward impact on prices.
• Secondary impact from supply shock can lead to broad-based price hikes. 

INFLATION

• The pace of inflation increase expected to face upward pressure from higher oil prices.
• Trend inflation will become more difficult to read.
• It would be hard to measure CPI trends.
• Will conduct more thorough explanation on CPI going forward.
• New measures include expanding core CPI indicator and using latest data.
• Will check wage trends and corporate price action will sustain momentum.
• Inflation can fluctuate to the upside and downside.
• Watching spring wage talks.
• Cannot say how long it would take to judge whether energy supply shocks affect underlying prices.
• Still some distance from the target inflation rate.

APRIL MEETING

• Will re-examine central view on prices at April meeting.
• Biggest point for April meeting would be whether the median outlook on prices change.
• Will explain after the release of the April Tankan report whether they fully capture Middle East.
• If there's is a big enough risk, it's possible the BoJ would conduct policy by placing weight on that risk. 

MARCH MEETING

• Held rates steady this month and out emphasis on lower visibility regarding the likelihood of achieving the inflation target.

FX

• Forex has a larger impact on prices and underlying inflation than in the past. 
• Carefully watching any forex impact on prices

RATES

• No change in stance that the timing of future hikes would be looked at every meeting.
• Real interest rates are at a significantly low level.
• Will continue to raise policy rate if the economic and prices move in line with forecast, and in accordance with improvements in economy and prices.
• Currently re-evaluating natural interest rates based on latest data.

RISKS

• Middle East, oil prices, and FX markets development - need to pay attention to those risks affecting Japan.
• Not of the view that systemic risk situation is occurring in financial systems.

WAGE TALKS

• Prelim data shows wage momentum at small and medium sized firms could be better than in past years.
• Will turn to Rengo's first round of wage surveys.

JOINT ACTION

• There's no specific joint action with global central banks following the Middle East conflict.