Bank of Japan Deputy Governor Uchida in Japan’s Nikki Media this morning:
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You will maintain YCC with the perspective of maintaining easy cash conditions
- Want to decide from the perspective of how to maintain an easy policy while focusing on the impact on brokerage, and market function, when asked about the potential for YCC modification
- Japan is seeing signs of change in corporate wage and price-setting behaviour
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The risk of missing the opportunity to reach 2% inflation with an early policy shift is greater than with a late tightening
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There is a long way to go to end the negative interest rate, a decision that would amount to a 0.1% hike.
And on the yen:
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One-sided rapid depreciation of the yen is undesirable, and forex should move steadily reflecting economic fundamentals
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Uchida isn’t referring here to a near-term change in YCC, but he doesn’t seem to overemphasize it. Preserving the opportunity to amend the YCC at the next BoJ meeting. There are a few weeks until the meeting and a lot of comments to come before then.