Bank of Japan board member Noguchi: Japan’s economy is growing steadily ...Middle East

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Bank of Japan board member Noguchi: Japan’s economy is growing steadily

Bank of Japan board member Noguchi:

Japan’s economy is growing steadilyJapan’s economy is currently shifting to a new phase where sustainable inflation is realized accompanied by wage increasesDownside risks to Japan economy stemming from overseas economies have rapidly heightened due to U.S. tariff policiesBOJ likely to keep adjusting policy rate while carefully examining whether underlying inflation would be stabilising around 2%BOJ shouldn’t pre-set terminal rate in raising ratesBOJ should spend time gauging impact of each rate hike on economy, scrutinise risks, before moving to next hike10-year JGB yield rose near 1.6% in March but I didn’t see it as disruptive as it reflected change in market’s view on terminal ratePersonally don’t see need to make big changes to existing BOJ taper planAs for taper plan for April 2026 onward, we need to examine with a longer-term perspectiveBOJ can spend sufficient time reducing its balance sheet, doing so is desirable for market stabilityBOJ is maintaining loose monetary policy as rise in inflation is mainly driven by import costs, not necessarily sustainableMonetary policy must focus on underlying price moves that are strongly linked to nominal wage developmentsWage, domestic demand-driven price pressure not strong enough but steadily increasingOur basic monetary policy stance should be to cautiously move on policy adjustment while scrutinising economy and its risks

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    This article was written by Eamonn Sheridan at www.forexlive.com.

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