"I personally see slightly more downside risks [for Japan's economy], primarily due to heightened uncertainty in overseas economies, particularly in emerging countries"
-Takahide Kiuchi, BoJ policy board member
During the Kisaragi-kai meeting Bank of Japan Governor backed widely-discussed aggressive easy policy saying the world's third largest economy is moving towards the path of reaching the 2% price stability target. However, he also noted the importance of achieving the target in a stable manner, rather than a temporary achievement will be sufficient. Meanwhile, the BoJ is expected to continue with a proper monetary policy as soon as they overcome deflation, which has been a major drag on the economy for a protracted period.
Despite obvious economic amelioration, the constantly rising interest rates of Japanese long-term securities, is a major concern. Kuroda, however, considers it as not an issue, planning to subdue these rises through the bank's large scale of government bond buying operations. Meanwhile, while domestic demand and exports strengthened, production and business fixed investment in the manufacturing sector are still lagging to improve.
Separately, a BoJ's member known for his cautious views highlighted high risks posed to Japan by overseas economies. Takahide Kiuchi expressed his concerns over the stable improvement in Japanese exports, which is expected to benefit from a weaker Yen, however, overseas economies are not likely to bode well for exporters.
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