BOJ monetary policy board member Noguchi speaking
- Says Japan’s economy is to recover moderately
- the global economy and markets are a risk to Japan’s outlook
- the shape of the yield curve is now smooth as a whole
- new guidance shows the BOJ’s strong commitment to patiently keep easing
- The inflation expectations of the Japanese public are yet to be anchored at 2%
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BOJ must consider trade-off between economic stimulus effect and
market function, in setting allowance band for 10-year yield target - What’s most
important is to ensure momentum for wage growth becomes trend, by
maintaining easy policy
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Need to carefully gauge for now whether the ‘norm’ for inflation and
wages is changing - Service prices are
rising in Japan but impact of wage pressure not so big yet
That ‘smooth as a whole’ comment is a little unclear. I’m guessing he is referring to the fewer distortions seen since the BOJ widened the tolerance band for 10 Year JGBs to trade +/-50bp from around zero (from prior +/-25).