Signals of further easing in Japan

Bank of Japan (BoJ) Governor Ueda has signaled that monetary easing could continue in Japan. Bank of Japan (BOJ) Governor Kazuo Ueda has signaled that he will not abandon monetary easing without changing the bank’s guidance on inflation targeting. Holding a press conference in India, where the G-20 finance ministers and central bank governors met on Tuesday, Ueda said that if his assumptions that inflation will not yet reach the 2 percent target in a sustainable manner do not change, the general approach to monetary policy, i.e. easing policies, will not change either. Stating that the BOJ will evaluate Japan’s progress in achieving the 2 percent inflation target in a sustainable manner at every policy meeting, Ueda said, “We have patiently maintained our extremely loose monetary policy under yield curve control (YCC).” MUFG Bank Ltd. Japan Economist Takahiro Sekido said that Ueda’s speech conveyed that he still does not foresee sustainable inflation and that he was trying to reassure markets that monetary easing will continue. “But that doesn’t rule out the possibility of removing or adjusting the YCC in the near future. I see a 30 percent chance of that happening in July and a 70 percent chance of it happening in October,” Sekido added.