BoJ deputy governor says delaying on price risks could cause long-term economic damage
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The overshoot warning is the sharpest language Himino has used across both sets of remarks on Friday and lifts the hawkish temperature of the session considerably. Framing delay itself as a risk, rather than premature action, signals the BoJ's reaction function has shifted toward
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BoJ's Deputy governor warns yen moves now carry bigger inflation punch than in the past
BOJ policymaker Masu warns that yen depreciation may raise inflation expectations
The desk views the recent commentary from BOJ policymaker Masu as a critical signal regarding the potential for yen depreciation to elevate inflation expectations in Japan. Per the full note [source], Masu highlighted the risks associated with rising inflation expectations that could stem from a weaker yen, emphasizing the need for the BOJ to maintain a vigilant policy stance. This aligns with our assessment that the BOJ may need to adjust its policy rate in response to evolving economic conditions, particularly as Japan grapples with inflationary pressures that have emerged more prominently than in previous decades. Current market sentiment reflects a cautious approach, with traders anticipating potential policy shifts in the near term.
BOJ policymaker Koeda: Inflationary risk is already materialising
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