BoJ And Abe Government To Restart Meetings

Bank of Japan Governor Haruhiko Kuroda and Prime Minister Shinzo Abe will revive their regular meetings this month, people familiar with the matter said, in a sign the government may be concerned about recent stock market declines and an uptick in the yen.

Kuroda has remained bullish about the outlook for economic recovery and an escape from deflation, but the meeting with Abe could revive expectations of additional stimulus.

However, the sources said the government won’t be attempting to pile pressure on the BOJ for more monetary easing, one year after the central bank launched its unprecedented stimulus.

The central bank remains confident that it can meet its 2 percent inflation target by around April next year without resorting to additional monetary easing, a point Kuroda made clear at his news conference last Tuesday.

But the recent selloff in stocks and an uptick in the yen, in part caused by market disappointment over Kuroda’s denial of immediate action, has prompted the BOJ to reiterate to markets that it remains ready to act if needed.

“Of course we’re making steady progress toward meeting our 2 percent inflation target, but we’re only half way through,” he told a news conference after attending the G20 finance leaders’ gathering on Friday.

“That’s why we will continue to steadily proceed (with the current ultra-loose policy) and will adjust monetary policy without hesitation if achievement of our price target is threatened,” he said.

The BOJ’s efforts to explain its stance come as the central bank felt that markets misinterpreted Kuroda’s comments last Tuesday by focusing too narrowly on his denial of immediate action, the sources said on condition of anonymity.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza