Ueda is speaking in Osaka. Headlines via Reuters:
- Japan’s economy recovering moderately
- Our basic stance is
that we must patiently maintain monetary easing - Current policy
framework has big stimulative effect on economy, but at times could
cause big side-effects - BOJ’s July move
helped heighten sustainability of our monetary easing framework - Our baseline
scenario is for key driver of inflation to gradually switch,
strengthen virtuous wage-inflation cycle - Effect of rising
import prices likely to gradually dissipate - Uncertainty
surrounding our baseline scenario is very high, not sure at this
stage whether this will materialize - There is good chance
wage growth will accelerate as competition for talent intensify - Changes in corporate
behaviour could speed up more than expected
-
On the other hand, wages, prices may struggle to rise if Japan’s
economy is hit by negative external or internal shocks - Many
firms still have not decided whether to hike wages significantly, so
we must scrutinise whether changes in corporate wage-setting
behaviour could be sustained
- Stable, sustainable achievement of 2% inflation not yet in sight
- Japan’s economy is
at critical stage on whether it can achieve a positive wage-inflation
cycle
-
Must continue to be vigilant to chance past sharp US rate hikes could
affect economy, financial system with a lag - Chinese economy’s
slow pace of pick-up is also worrying
There is plenty of nuance in Ueda’s remarks. The summary is that bolded comment though. Without stable and sustainable 2% inflation there is little urgency for the Bank of Japan to tighten monetary policy.
Full text:
Japan’s Economy and Monetary Policy (PDF)
BoJ Governor Ueda