Dialogue from Davos with Japan's BOPJ head
- Some countries are benefitting from lower oil prices
- Doesn't think China is faced with a hard landing
- Chinese growth is quite respectable
- Is relatively optimistic about Chinese growth prospects
- Deflationary pressures are still a real risk
- If you exclude energy, underlying inflation is 1-1.5%
- Doesn't think global economy is on the brink of sharp deflation
- Inflation will pick up once oil stabilises
- BOJ's focus is that 2% CPI will be reached in second half of FY2016
- But depends on oil prices
- Japan could reach target earlier or later depending on oil
- Japanese inflation expectations a well maintained now
- BOJ are carefully watching global conditions
There's been a lot of focus on whether the BOJ will push back that target. If they did push it back the market would take that as a signal that more easing could be on the way. The fact he's sticking to it keeps more easing off the table and USDJPY is because of it.
118.00 is being tested from 118.20
More;
- 2/3 of Japanese bond market is still available to buy
- If underlying inflation trend changes we can expand QQE
- There are many ways to strengthen the QQE program
- Japanese economy is recovering moderately
Here comes the rebound
