Bank of Japan monetary policy board member Nakagawa:
- One-sided yen falls subsided somewhat but rising import prices could affect consumer inflation with a lag
- Prolonged inflation overseas could put upward pressure on Japan's import prices
- Must be mindful of impact of overseas, domestic market moves on Japan's inflation
- Japan's exports, output likely to resume uptrend as overseas economies sustain moderate growth
- Wage growth likely to accelerate as a trend reflecting rising prices
- Consumption likely to increase moderately reflecting higher wages, albeit being affected by rising prices for time being
- Expect inflation to gradually accelerate as a trend
- Achievement of wage-inflation cycle is in sight
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Must be mindful of upside risk to inflation, downside risks
surrounding overseas economies
there is a risk delay in recovering of consumer sentiment could prevent rising income from translating into higher spending - Even after July rate hike, real interest rates remain deeply negative, accommodative monetary conditions maintained
- If long-term rates spike, BOJ could review its taper plan at its policy meeting as needed
- BOJ likely to adjust degree of monetary easing if economy, prices move in line with its projection
- There is no big change to Japan's economic fundamentals including record profits at Japan firms
- When considering adjusting degree of monetary easing further, we will scrutinise market developments after July rate hike and how that affects economy, prices
Yen gaining:
