Bank of Japan Gov Ueda expects strengthening in Japan wage-price cycle – higher inflation

Bank of Japan Governor Ueda speaking from parliament

• expects strengthening in Japan wage-price cycle – underlying inflation to gradually accelerate
• sees Japan’s economy recovering moderately
• monitoring the FX impact on economy and inflation
• data out since April roughly in line with BoJ estimates

• We need to scrutinise data a bit more to judge whether underlying
  inflation will heighten on a firm note
• If we become more
  convinced that underlying inflation will accelerate toward our price
  target, we will adjust degree of monetary easing by raising
  short-term policy rate

• Inflation-adjusted real wages continue to decline but expected to
  slow pace of decrease as a trend
• Cannot say now how
  much BOJ will actually trim bond buying

• Want to avoid using bond buying operation as a monetary policy tool,
  means of communication on monetary policy

At their meeting the last week Ueda and the BOJ said they’d be announcing plans to trimg JGB purchases at the next meeting., July 30 and 31.

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