The BOJ chimes in to make sure the market knows that they are also doing the same as the Fed
- BOJ not considering adding employment mandate
- BOJ not thinking of reconsidering negative rates response for now
- Must look at developments further to gauge how Fed's new strategy affects other central banks' policies
Wakatabe is referring to the central bank's current policy framework - which has been in place since 2016 - on inflation overshooting:
"The Bank has introduced an inflation-overshooting commitment, under which it continues expanding the monetary base until the year-on-year rate of increase in the observed CPI (all items less fresh food) exceeds 2 percent and stays above the target in a stable manner. Through this commitment, the Bank aims to enhance the credibility of achieving the price stability target of 2 percent among the public."
As mentioned before, more and more central banks are going to come out to respond in similar kind to the Fed's latest change from last week.
Nobody wants to be last in the race to the bottom and the BOJ is offering a reminder that they are keeping pace with the Fed in terms of their policy outlook/framework.
