"Japan is making steady progress toward beating deflation and reviving the economy due in part to the BOJ's quantitative and qualitative monetary easing,"
- Shinzo Abe, Japan's Prime Minister
A note of caution for Japanese policymakers came out on Wednesday, as Japanese Prime Minister Shinzo Abe refused to grant the central bank a total independence. Even though, Abe claimed he completely trusts Haruhiko Kuroda and his team and does not exclude such an opportunity in the future. During his speech in parliament Shinzo Abe said he hopes the central bank will steadily proceed with its unprecedented stimulus programme to beat persistent deflation and weak growth in the world's third largest economy as well as focus on job creation.
The most interesting part for traders was the question about further easing from the BoJ. Shinzo Abe, however, refused providing any bold statements, saying any specific steps should be left to the central bank to decide, citing Kuroda's remark he will not hesitate to add more stimulus in case the path to meet the 2% inflation target is under threat.
This week's highlight is Japan's inflation data scheduled for Thursday. While core inflation is likely to show no change, household spending, unemployment rate and industrial production can push the Yen higher. It is highly probable the central bank will remain in a "wait-and-see" mode until April's consumption tax hike.
© Dukascopy Bank SA