Bank of Japan Deputy Governor Himino:
- BOJ will patiently maintain easy policy until sustained, stable achievement of price target is in sight
- Japan's financial system is likely resilient enough to weather stress from transition to higher interest rates
- If we do not get the timing exit procedures wrong, the impact of a positive wage-inflation cycle will likely benefit wide range of households, companies
- Must make appropriate decision on exit timing, procedure by scrutinising wage, inflation developments
- BOJ must achieve situation where inflation slows ahead, but not too much
- Japan is seeing steadily changes in price, wage behaviour
- Solid progress is observed in the transformation of firms' wage- and price-setting behaviour
- price rises beginning to affect wages
- pass-through from wages to inflation is also returning somewhat
- without virtuous cycle between wages and prices, japan will most likely revert to the deflationary state in the past
- When Japan returns to an economy with positive interest rate, that could improve households' balance as a whole
If inflation expectations have heightened, that would mean impact of rise in real interest rate could be smaller than that of nominal rate
USD/JPY is little changed around 147.25
