Bank Japan Gov Ueda: Must be vigilant to impact of weak yen, import price moves on economy

Bank of Japan Governor Ueda:

• As we taper bond buying, we will of course be aiming to shrink size
  of our balance sheet in ratio to GDP terms
• Basic purpose of our
  bond tapering would be to allow yields to move more freely driven by
  market forces, and revive market functioning
• Japan’s economy will
  likely see more clear signs of positive wage-inflation cycle as
  nominal wages rise
• Must be vigilant to
  impact of weak yen, import price moves on economy

• Corporate price, wage-setting behaviour clearly changing on record
  profits, tightening job market

• Nominal wages likely to rise ahead and gradually lead to positive
  real household income, underpin consumption

• Consumption likely
  to increase moderately as nominal wage gains accelerate

• For now, don’t
  expect japan to experience stagflation

Earlier from Ueda:

• Bank of Japan Gov Ueda expects strengthening in Japan wage-price cycle – higher inflation
• Bank of Japan Governor Ueda says chance we could raise interest rates at July meeting

Meanwhile, USD/JPY is still moving in a small range only:

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