JPY: BoJ’s Ueda Emphasizes Positive Wage-Inflation Cycle for Price Target Success
The BoJ Governor Khazao Ueda Addressed Japan Parliament today and said Wage- inflation cycle is improving is based on incoming data, People purchasing power increasing by less cost push inflation pressure. We need some more data points to judge is real wage price is hiking towards Inflation reading in the economy.
Bank of Japan (BoJ) Governor Kazuo Ueda is scheduled to address the Japanese Parliament, the Diet, on Tuesday. Here are key points from his speech:
– Japan’s economy is recovering moderately, despite some weak data.
EURJPY is moving in Ascending channel and market has rebounded from the higher low area of the channel
– Consumption is improving due to easing cost-push pressure and optimism for higher wages.
– Some firms are delaying investment, but capital expenditure plans remain strong.
– Various data have been observed since January, and more will be released this week. A comprehensive analysis of these data will guide our monetary policy decisions.
– Our focus is on determining whether a positive wage-inflation cycle is starting, as we assess the likelihood of sustained, stable achievement of our price target on the horizon.
JPY: BOJ Chief Ueda Tempers Economic Optimism
The BoJ Governor Khazao Ueda Addressed Japan Parliament today and said Wage- inflation cycle is improving is based on incoming data, People purchasing power increasing by less cost push inflation pressure. We need some more data points to judge is real wage price is hiking towards Inflation reading in the economy.
USDJPY has broken box pattern in upside
Bank of Japan Governor Kazuo Ueda offered a slightly less optimistic outlook on the economy on Tuesday, noting signs of weakness alongside a recovery. This assessment, a contrast to January’s report, precedes the upcoming policy meeting where the board will discuss the possibility of phasing out massive monetary stimulus. Ueda highlighted weakening consumption in food and daily necessities due to higher prices but noted moderate improvement in household spending, driven by expectations of higher wages. The focus remains on assessing the initiation of a positive wage-inflation cycle for sustainable achievement of the price target. No clear indication was given on the timeline for ending negative rates. Finance Minister Shunichi Suzuki emphasized that Japan hasn’t overcome deflation despite positive developments. Despite economic challenges, market expectations lean toward the BOJ ending negative rates in April. Policymakers may consider this move during the March 18-19 meeting, with growing anticipation fueled by expectations of significant pay hikes in annual wage negotiations.
Wage talks are projected to result in an average increase of approximately 3.9%, the highest in 31 years, supporting efforts to achieve the 2% inflation target. Currently, the BOJ guides short-term rates at -0.1% and the 10-year government bond yield around 0%.
JPY: BOJ’s Ueda Affirms Gradual Economic Recovery Before Meeting
The BoJ Governor Khazao Ueda Addressed Japan Parliament today and said Wage- inflation cycle is improving is based on incoming data, People purchasing power increasing by less cost push inflation pressure. We need some more data points to judge is real wage price is hiking towards Inflation reading in the economy.
EURJPY has broken Ascending channel in downside
Bank of Japan Governor Kazuo Ueda confirmed the ongoing gradual recovery of the economy, signaling the central bank’s potential move to end its negative interest rate in the near future. Despite some signs of weakness in certain statistics, Ueda expressed confidence in the gradual economic recovery during his parliamentary response on Tuesday. He highlighted weakness in personal consumption but emphasized the steady increase in capital investment by businesses.
Ueda’s comments had an immediate impact on the market, with the yen weakening against the dollar and the Nikkei index adjusting its drop. The sensitive market response reflects the uncertainty surrounding whether the central bank will implement its first interest rate hike since 2007 at the upcoming policy board meeting on March 19 or opt to wait until April.
Acknowledging the need to assess the latest data, Ueda emphasized that more information would be available this week, likely referring to the outcomes of annual wage talks. The market awaits the announcement of an agreement on Friday from the largest umbrella group for unions, a crucial factor in determining the central bank’s decision.
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