BoJ’s Sato: De-escalation of Middle East conflict is welcome move, uncertainty remains
Japanese Prime Minister (PM) Sanae Takaichi's administration newly appointed Bank of Japan (BoJ) board member, Ayano Sato, said in his scheduled press conference during the European trading session on Tuesday that the de-escalation of the Middle East conflict is welcome news for the economy, but uncertainty surrounding the economic outlook remains intact.
Additional remarks
Will scrutinise impact of middle east developments on Japan's economy, prices.
Firms more actively raising wages, prices so impact of weak Yen on inflation may be bigger than in past.
Weak yen gives boost to exports but pushes up import prices, leading to lower real household income.
Important for fiscal, monetary policies to each play their roles.
Monetary policy should focus on inflation, while fiscal policy should focus on addressing impact on households, firms.
Won't comment on specific FX levels.
Short-term, volatile FX moves undesirable.
FX moves should be determined reflecting fundamentals.
Need to watch both downside risks to growth and upside risks to inflation,
Important to scrutinise whether recent inflation is temporary, cost-driven price rises or more sustained, demand-driven inflation.
Market reaction
No immediate reaction is seen in the Japanese Yen (JPY) after the introductory speech by BoJ's Sato. At press time, USD/JPY trades 0.22% higher to near 162.30.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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