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BOJ’s Ueda: Underlying inflation is still under 2%

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  • We’re monitoring the situation with the yen very carefully but it’s the jurisdiction of the ministry of finance
  • Wage inflation is now running at around 2%
  • If you want a 2% inflation rate, you want wage inflation that’s slightly or well-above 2% to match productivity growth, so there’s still some ground to cover
  • Yen is being influenced by many factors, including the policy of these other central banks
  • If we become reasonably sure about the second part of inflation forecasts, that would be a good reason for reconsidering a policy change
  • Investment is fairly strong at the moment
  • We think the economy is going to expand at slightly-above potential for some time
  • We do talk but do policy independently
  • Demographics are working to tighten the labour market for quite a long while and that will continue
  • We haven’t had any serious monetary policy tightening in decades
  • If we do get to normalize our normal monetary policy, then rates may go up by large margins and we will have to be careful and carry out all kinds of stress tests
  • It’s the business of the diet to create sustainable finances
  • Wage growth is a good sign for us

The yen is the currency that could be a big mover on these comments if Ueda hints at an end to yield curve control.

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