Bank of Japan chief Haruhiko Kuroda highlighted his determination to stoke inflation in the world’s third-biggest economy, saying there’s no limit to measures he could take to reach its price target.
It’s natural to act if risks to price gains become substantial, and last week’s stimulus was “a true display of the Bank’s unwavering commitment,” Kuroda said in a speech in Tokyo today.
“As for measures for additional easing, I don’t think there is a limit, including on bond purchases.” Convincing consumers and companies that he means business is critical to the central bank’s efforts to end what it calls a “deflationary mindset” in Japan.
The BOJ last week surprised markets with an expansion in already-unprecedented asset-purchase program that sees it ready to buy every new bond issued by the government.
“There is no way back for Kuroda,” said Maiko Noguchi, an economist at Daiwa Securities Co. and a former BOJ official.
“I do think there will be a limit to how much the BOJ can purchase, but Kuroda can’t admit it as he makes a desperate attempt to influence expectations.”
The central bank will continue easing as long as needed to achieve stable 2 percent inflation and will adjust its monetary policy without hesitation if necessary, Kuroda said. “This policy stance is unchanged even after the recent action,” Kuroda said.
Yen Declines
The yen fell 0.5 percent to 114.14 per dollar at 2:46 p.m. in Tokyo. The Topix index of shares was little changed, recovering from a 0.6 percent decline earlier today.
The Japanese currency has tumbled 4.3 percent against the dollar since Oct. 30, the day before the BOJ announced its extra stimulus, extending its decline to 10 percent over the last three months.
The weaker currency will boost Japan’s exports and lead to increased profits, Kuroda said. At the same time, it will put downward pressure on companies in the non-manufacturing sector and on real incomes, he said.
The cost of living in Japan has risen at a faster rate than wages, squeezing household budgets and challenging Prime Minister Shinzo Abe’s effort to generate a sustained recovery in the economy.
Cash earnings rose 0.8 percent in September from a year earlier, with average salaries excluding bonuses and overtime payments climbing 0.5 percent, the most since February 2008, according to government data release today. Earnings adjusted for inflation fell 2.9 percent, a 15th straight monthly drop.
bloomberg.com
It’s natural to act if risks to price gains become substantial, and last week’s stimulus was “a true display of the Bank’s unwavering commitment,” Kuroda said in a speech in Tokyo today.
“As for measures for additional easing, I don’t think there is a limit, including on bond purchases.” Convincing consumers and companies that he means business is critical to the central bank’s efforts to end what it calls a “deflationary mindset” in Japan.
The BOJ last week surprised markets with an expansion in already-unprecedented asset-purchase program that sees it ready to buy every new bond issued by the government.
“There is no way back for Kuroda,” said Maiko Noguchi, an economist at Daiwa Securities Co. and a former BOJ official.
“I do think there will be a limit to how much the BOJ can purchase, but Kuroda can’t admit it as he makes a desperate attempt to influence expectations.”
The central bank will continue easing as long as needed to achieve stable 2 percent inflation and will adjust its monetary policy without hesitation if necessary, Kuroda said. “This policy stance is unchanged even after the recent action,” Kuroda said.
Yen Declines
The yen fell 0.5 percent to 114.14 per dollar at 2:46 p.m. in Tokyo. The Topix index of shares was little changed, recovering from a 0.6 percent decline earlier today.
The Japanese currency has tumbled 4.3 percent against the dollar since Oct. 30, the day before the BOJ announced its extra stimulus, extending its decline to 10 percent over the last three months.
The weaker currency will boost Japan’s exports and lead to increased profits, Kuroda said. At the same time, it will put downward pressure on companies in the non-manufacturing sector and on real incomes, he said.
The cost of living in Japan has risen at a faster rate than wages, squeezing household budgets and challenging Prime Minister Shinzo Abe’s effort to generate a sustained recovery in the economy.
Cash earnings rose 0.8 percent in September from a year earlier, with average salaries excluding bonuses and overtime payments climbing 0.5 percent, the most since February 2008, according to government data release today. Earnings adjusted for inflation fell 2.9 percent, a 15th straight monthly drop.
bloomberg.com
No comments:
Post a Comment