Wednesday, November 25, 2015

Shouldn’t rule out any options to adjust policy – BOJ’s Shirai

FXStreet (Mumbai) - Bank of Japan (BOJ) board member Sayuri Shirai was on the wires today, and noted that the central bank 2% price target should be met at the earliest. He further added should the prices fail to rise as expected, then the BOJ may consider rolling out further stimulus.

Key Quotes:

No change to my view Bank of Japan must hit 2 pct
inflation at earliest date possible but must be mindful of how rising prices could hurt households

Some households are enjoying benefits of rising wages and spending more, monetary policy must support such positive momentum

Must consider two-year timeframe for hitting boj's inflation target with some flexibility

Unclear at what pace inflation expectations will heighten ahead

Bank of Japan isn't having any problem buying assets under QQE

If any problems emerge in buying assets in future, Bank of Japan can come up with other ways to sustainably achieve 2 pct inflation

Can determine outlook for inflation expectations once underlying prices start to rise

If broad uptrend in prices fails to materialise, Bank of Japan must consider whether easing is not enough or whether other steps are needed

Changing size of BOJ's purchases of jgbs, risk assets or buying longer-dated Japanese Govt. Bonds most likely first option if Bank of Japan were to adjust policy again

Bank of Japan shouldn't rule out any policy options but basic idea is to maintain framework of QQE even if it were to adjust policy
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