30 Apr 2014
BoJ's Kuroda: Sales tax hike not expected to derail economic recovery
FXStreet (Łódź) - Speaking after the announcement of the Bank of Japan's monetary policy decision to remain on hold in April, governor Haruhiko Kuroda said that Japan's economy was recovering at a moderate pace and that easing would be continued until the 2% inflation target was reached and stable.
The BoJ chief assured that the Japanese economy would continue growing above potential even with the increase of the sales tax, but that its impact would be carefully monitored. He emphasized that the employment situation in the country was improving with a marked rise in wages, and consumer spending remained solid.
He explained that monetary policy was kept steady as the easing was having the intended effect, but that the central bank was ready to make adjustments should the need arise. He added that it was too early to talk about the exit from easing.
Furthermore, Kuroda signaled that policy board members Shirai, Sato and Kiuchi opposed the wording on timing of reaching 2% target, which resulted in a slight weakening of the yen.
Derek Halpenny, European Head of Global Markets Research at The Bank of Tokyo-Mitsubishi comments: “There is nothing from the BOJ today to expect the yen to be driven weaker still any time soon by monetary policy in Japan – if USD/JPY is going to move higher over the coming months, it will be from the US side and not the yen side.”
The BoJ chief assured that the Japanese economy would continue growing above potential even with the increase of the sales tax, but that its impact would be carefully monitored. He emphasized that the employment situation in the country was improving with a marked rise in wages, and consumer spending remained solid.
He explained that monetary policy was kept steady as the easing was having the intended effect, but that the central bank was ready to make adjustments should the need arise. He added that it was too early to talk about the exit from easing.
Furthermore, Kuroda signaled that policy board members Shirai, Sato and Kiuchi opposed the wording on timing of reaching 2% target, which resulted in a slight weakening of the yen.
Derek Halpenny, European Head of Global Markets Research at The Bank of Tokyo-Mitsubishi comments: “There is nothing from the BOJ today to expect the yen to be driven weaker still any time soon by monetary policy in Japan – if USD/JPY is going to move higher over the coming months, it will be from the US side and not the yen side.”