Bank of Japan Deputy Governor Uchida in Japan’s Nikkei media this morning:
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Will maintain YCC from perspective of sustaining easy monetary
conditions - Want to make
decision from perspective of how to sustain easy policy with eye on
impact on financial intermediation, market function, when asked about
likelihood of tweaking YCC - Japan is seeing
signs of change in corporate wage, price-setting behaviour -
Risk of missing chance to hit 2% inflation with premature policy
shift is bigger than being too late in tightening monetary policy
-
There is huge distance to ending negative rate, a decision that would
be tantamount to a 0.1% rate hike
And, on the yen:
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Rapid, one-sided yen declines are undesirable, fx must move stably
reflecting economic fundamentals
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Uchida here is not indicating a near-term change to YCC, but he isn’t sounding overly emphatic on it. Keeping alive the chance of a YCC tweak at the next BOJ meeting. There are a few weeks until the meeting and plenty more comments to come before then.