BOJ’s Ueda says will consider policy changes once achievement of price target is in sight

• We must scrutinise whether positive wage-inflation cycle emerges
• That will determine whether conditions for phasing out stimulus are falling into place
• This year’s wage talks is critical in deciding timing on exit from stimulus
• We will scrutinise wage talks outcome as well as other data in making decision
• Will consider tweaking negative rates, YCC and other monetary easing tools if sustained achievement of price target comes into sight

He sure doesn’t sound like he is in a rush to make big changes next week. If they are confident enough, he probably shouldn’t keep alluding to the need to keep waiting. In any case, the pressure is certainly on for Ueda at the moment. He has disappointed markets throughout the whole of last year already and is once again under the spotlight.

Japan prime minister Kishida has also come out to say that he “hopes” the BOJ will make its monetary policy decision by “taking into account the government’s policy stance”. The two sides are definitely aligned but it now comes down to how the BOJ needs to manage this transition. A decisive move next week or kicking the can down to April?

This article was written by Justin Low at www.forexlive.com.