- Expects Japan to further progress towards 2% inflation in stable, sustainable manner
- Uncertainty surrounding economy, price outlook is high
- Must avoid returning to deflation or low inflation environment
- As Japan transitions towards sustained achievement of 2% inflation, BOJ will support the economy by keeping rates below the neutral level
- But as economic, price developments continue to improve, BOJ must raise rates accordingly
- Leaving accommodative policy for too long could lead to sharp increase in interest rates
- That in turn will be negative for long-lasting economic growth
- It would be desirable for BOJ to guide policy so that it does not reach zero lower bound again
Just some token remarks there by Ueda but he’s not giving anything away on the January decision this time. But his remarks last week here will definitely still be echoing into the new year. So, do keep that in mind when taking stock of the BOJ when markets get back on the saddle in January.
This article was written by Justin Low at www.forexlive.com.
