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After creating havoc in the Japanese Yen markets, Bank of Japan (BoJ) Deputy Governor Shinichi Uchida is back on the wires now, via Reuters, commenting on the bank’s next policy move, the recent market volatility and the economic outlook. Key quotes Market volatility very large, so will keep a close eye out on moves and their impact on economy, prices. Real interest rates remain very low and will underpin economy. Personally think there are now more factors that require being cautious, when asked about the BoJ’s next rate hike timing. Personally think stock markets will calm down at some point given they reflect corporate earnings, state of Japan’s economy. There is no gap in views between governor and myself, my comments reflect changes in latest market developments after last week’s BoJ meeting. Personally think there are now factors that require more caution about raising interest rates. FX should move stably reflecting fundamentals. Markets still volatile so still unclear how moves will affect economy, price outlook. BoJ has advantage of being able to choose when to hike rates in a moderate rate-hike environment. Hard to say how long it will take to gauge impact of market rout on economy, price. If market volatility changes our view on prospects for achieving price goal, that will influence our decision on rate hike path. Don’t have specific level in mind on what is Japan’s neutral rate of interest. Market reaction The Japanese Yen trims gains following these above comments, as USD/JPY reverses sharply from near 148.00 toward 147.00. The pair is currently trading at 147.20, still up 2.20% on the day.   Source: https://www.fxstreet.com/news/bojs-uchida-will-keep-a-close-eye-out-on-moves-amid-massive-market-volatility-202408070550

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Filed under: News - @ August 7, 2024 8:14 am