BOJ Deputy Governor Himino says Japan’s real interest rate remains very low

• Appropriate to continue raising rates in line with improvements in the economy and prices

• Notes there are both upside and downside risks to the outlook for growth and inflation

• BOJ wants to scrutinise without preset assumptions whether baseline projections materialise

• Japan–US trade agreement is major progress, reduces uncertainty over Japan’s outlook

• But uncertainty remains around trade policy impacts and the outcome of US–China talks

• Global economic uncertainty remains high

• Trade policy’s impact on Japan’s economy may not prove significant

• Baseline scenario is for corporate profits to come under pressure from global slowdown and trade policy

• There is both Chance trade policy impact could be smaller or bigger than expected, must focus on possibility it could be bigger than expected
• BOJ’s baseline scenario is for underlying inflation to stagnate but eventually reach 2%
• Underlying inflation is recently quite close to 2% but has yet to reach that level

The yen is showing some weakness after Himon has spoken. While rate hikes are coming, there is no rush.

Full text is here:

• Japan’s Economy and Monetary Policy, Speech at a Meeting with Local Leaders in Eastern Hokkaido

This article was written by Eamonn Sheridan at investinglive.com.