BoJ's Tamura says he feels Japan's recent inflation is becoming sticky and reiterates will keep raising rates if outlook is met, adds we may be able to judge that BoJ's price goal has been achieved as early as this spring

The BoJ's Tamura signaling concerns about sticky inflation is notable as it suggests a shift in the central bank's policy stance.

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BoJ's Tamura says he feels Japan's recent inflation is becoming sticky and reiterates will keep raising rates if outlook is met, adds we may be able to judge that BoJ's price goal has been achieved as early as this spring

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Says:

  • Even if the BoJ raises the policy rate further, monetary conditions will remain accommodative.
  • Once the BoJ's policy rate goes above 1%, the stimulative impact of monetary policy is expected to gradually diminish.
  • Wage growth is projected to reach levels that align with the 2% inflation goal this year.
  • The final factor in assessing whether the BOJ's price target is met is observing if inflation has become embedded.
Context

His indications that rate hikes may continue if the inflation outlook solidifies could lead to adjusted market expectations regarding future rate paths and potentially bolster the yen. Traders should watch for reactions in fixed income and currency markets as this reflects more than just a change in rhetoric but a developing narrative around Japan's inflation persistence.

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