Further commenting on the Japanese economic and inflation outlook, the Bank of Japan (BOJ) Deputy Governor Masazumi Wakatabe said that the economic recovery will become clearer as pandemic impact eases.
Additional quotes
Household sector under severe pressure due to pandemic.
Japan’s economy sustaining recovery trend.
Job, income conditions remain weak.
Households not yet experiencing positive cycle in which rising income boosts spending.
Households' pent-up demand likely to reach significant size, likely to help consumption recover.
Inflation expectations moving sideways with some signs of pick-up.
Further improvement in inflation expectations needed to achieve BOJ’s price target.
Japan's consumer inflation remains slightly positive when stripping away impact of one-off factors like cuts in cellphone fees.
BOJ’s efforts on climate change does not mean it is paying less attention to more imminent challenge of ending deflation, stabilising prices.
Japan has escaped deflation because BOJ has not wavered in its stance of maintaining aggressive monetary easing.
BOJ must avoid distancing itself from 2% price target, easy policy as doing so could destabilise fx market.
Japan won't achieve sustainable inflation with cost-push factors alone.
Possible for central banks to respond to climate change within their mandate.
USD/JPY reaction
USD/JPY is holding close to daily highs of 110.24, up 0.20% on the day, as the US dollar’s strength lifts the major.
