The first of the BOJ deputy governor nominees are up in the lower house confirmation hearing in parliament, Masazumi Wakatabe
- BOJ's 2% inflation target is effective and meaningful
- Inflation is still a distance from the target
- Expects continued monetary easing to push up real wages
- Need to avoid risk of premature exist from easing policy, which could push Japan back to deflation
- Now is a very critical moment for Japan's economy
- Keeping joint statement with the government is important (regarding deflation)
- Must reconfirm BOJ and government agreement to exit deflation
- Will need to consider more stimulus if hitting the 2% inflation target is difficult
- Impossible to deploy exit strategy before 2% inflation target is met
- Says that Kuroda spoke on exit based on the assumption of reaching the 2% target in fiscal year 2019
- Temporarily hitting 2% inflation target won't be enough to exit easing policy
- Merits from current stimulus outweighs the demerits
- Risks from negative interest rates have not yet materialised
Definitely does feel like Kuroda 2.0, doesn't it? Nothing too meaningful from Wakatabe so far, mainly reiterating the same stuff Kuroda and co has been saying for the past few years.
Bing, boom, bam! The bolded comments basically shows his stance on the matter, and he's clarifying the comments from Kuroda on Friday - which some analysts also argued that it was taken out of context a little.
