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.
PBoC's new emphasis on overnight money market rate has reportedly sparked speculation it could become the main policy target
Japan sells JPY 649.5bln in 10yr, 20yr and 30yr JGBs in enhanced liquidity auction; b/c 2.95 vs. Prev. 2.58
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
[MARKET ANALYSIS] Asia-Pac stocks declined after tech/AI-related concerns were stoked
[MARKET ANALYSIS] DXY lacks direction after its recent choppy performance and as CPI data looms
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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.
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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