JPY: BoJ’s Ueda: No Forex Rate Control in Monetary Policy
The BoJ Governor Ueda said in Parliament on Yesterday, Potential need for Policy changes in the economy, FX impact on our Yen prices and We must control by Policy settings. I am Focusing on inflation trend not on Yen price to control. Yen prices are impacted by huge Volatility by speculators and central bank interest rates divergence. We will not wait for 1.5-2 years for inflation to come to our target and then rise the rates. The Positive Wage cycle pushes the inflation cycle to higher in the economy. We are closely monitor the Yen Fluctuations in the economy. The Yen moved in Positive side after the Speech of Ueda on Parliament.
USDJPY is moving in Descending channel and market has reached lower high area of the channel
Bank of Japan (BoJ) Governor Kazuo Ueda addressed the Japanese parliament on Tuesday, expressing concern about the potential implications of foreign exchange movements and indicating readiness to take policy measures if necessary. He emphasized that the primary goal of monetary policy is to influence inflation rather than directly control the value of the yen. Ueda underscored the importance of monitoring the impact of yen fluctuations on the economy and prices, noting that such volatility could have a significant effect. He clarified that the BoJ does not intend to manage FX rates through monetary policy but recognizes the role of currency movements among various factors affecting the economy. Ueda highlighted the adverse effects of a weak yen, including increased import costs and potential impacts on demand. He affirmed the BoJ’s commitment to adjusting easing measures in response to changes in the inflationary trend, aiming for a gradual increase in trend inflation towards the target of 2%.
However, he acknowledged the possibility of yen movements exerting a more substantial influence on inflation in the future. Ueda stated that the BoJ may not wait until inflation reaches the forecasted levels within the next 1.5 to 2 years before considering adjustments to interest rates, indicating a willingness to respond preemptively to evolving economic conditions. He also noted the strengthening of inflationary pressure driven by a positive wage-price cycle.
JPY: BOJ’s Ueda Hints at Policy Response to Yen Impact on Inflation
Yesterday, during his parliamentary address, Bank of Japan Governor Ueda discussed the potential necessity for policy adjustments in response to economic conditions. He highlighted the impact of foreign exchange movements on the value of the yen and emphasized the importance of addressing such fluctuations through appropriate policy measures. Ueda stressed that the primary focus of monetary policy is to manage inflation trends rather than directly controlling the yen’s value. He attributed fluctuations in yen prices to significant volatility driven by speculative activities and disparities in central bank interest rates.
EURJPY has broken Descending channel in upside
Ueda expressed a proactive approach toward monetary policy, stating that the Bank of Japan would not wait for the forecasted period of 1.5 to 2 years for inflation to reach its target before considering adjustments to interest rates. He noted the role of a positive wage cycle in driving inflationary pressures upward within the economy. Additionally, Ueda highlighted the close monitoring of yen fluctuations as a key aspect of the Bank of Japan’s ongoing assessment of economic conditions.
Following Ueda’s remarks in parliament, the yen experienced a positive movement, indicating market reaction to his statements regarding monetary policy and the economy.
Bank of Japan Governor Kazuo Ueda addressed concerns on Wednesday, suggesting that the central bank might consider implementing monetary policy measures if significant fluctuations in the yen begin to heavily impact inflation. He emphasized the multifaceted effects of a weakened yen on the economy, citing increased import costs and potential shifts in consumer demand for goods and services.
While clarifying that the BOJ does not intend to directly intervene in yen movements through monetary policy, Ueda stressed the necessity of closely monitoring their potential substantial repercussions on economic conditions and price levels. He highlighted the evolving dynamics of wage and price adjustments among companies, indicating a heightened awareness of the increasing risk posed by currency volatility to inflationary pressures.
Ueda further emphasized during parliamentary discussions that exchange rate fluctuations could exert considerable influence on both the economy and prices, potentially necessitating a response through adjustments to monetary policy. These remarks contrasted with Ueda’s previous statements following the BOJ’s policy meeting the prior month, where he had indicated that the recent declines in the yen had not immediately impacted the trajectory of trend inflation.
Notably, market participants have interpreted Ueda’s post-meeting remarks as reinforcing expectations that the BOJ will maintain its current ultra-low interest rate policy for an extended period, possibly contributing to further depreciation of the yen in trading markets.
JPY: BOJ’s Ueda Adjusts Stance on Weak Yen, Hinting at Rate Hike
In his recent parliamentary address, Bank of Japan Governor Ueda articulated the imperative for potential policy adjustments within the economic landscape, emphasizing the ramifications of foreign exchange dynamics on the valuation of the yen and stressing the necessity for management through policy frameworks. Ueda delineated a deliberate shift in focus away from direct intervention in yen valuation towards a concentrated surveillance of inflationary trends. He elucidated the intricate interplay between yen valuation and the speculative activities of market participants, compounded by disparities in central bank interest rate policies. Ueda enunciated a departure from conventional timelines for policy actions, averring against a protracted waiting period of 1.5 to 2 years for inflation to align with target benchmarks prior to initiating adjustments in interest rates. Highlighting the catalytic role of a burgeoning wage cycle in fueling inflationary dynamics, Ueda underscored the meticulous monitoring of yen fluctuations within the economic milieu. Notably, subsequent to Ueda’s parliamentary discourse, the yen exhibited a discernible uptrend, reflective of market response to his enunciations.
GBPJPY is moving in Ascending channel and market has rebounded from the higher low area of the channel
Bank of Japan Governor Kazuo Ueda delivered a pointed message to financial markets regarding potential policy actions, notably amplifying his stance on the weak yen just a day following his meeting with Prime Minister Fumio Kishida.
In his address to parliament on Wednesday, Ueda underscored the significant impact of foreign exchange rates on both the economy and inflation. He hinted at the possibility of a monetary policy response depending on the trajectory of these currency movements. Ueda also emphasized the evolving dynamics within Japanese companies, noting an increased willingness to pass on rising costs to consumers through price adjustments, which heightens the likelihood of the weak yen influencing inflationary pressures.
The yen experienced a decline to an intraday low against the dollar shortly after Ueda’s remarks, indicating potential concerns about the need for prompt action to mitigate the effects of last week’s suspected intervention.
Ueda’s adjustment in tone regarding the yen follows previous comments perceived as relatively soft, which failed to stem the yen’s depreciation. This shift in rhetoric, coupled with similar cautionary statements made after his meeting with Prime Minister Kishida, has fueled market speculation regarding potential policy actions in upcoming meetings.
Japanese Minister of Finance Shunichi Suzuki echoed Ueda’s sentiments during the parliamentary session, expressing strong concerns about the negative implications of the weak yen, particularly regarding upward pressure on import prices. Suzuki emphasized the significance of addressing rising prices as a critical policy issue.
The collective effort by top financial authorities reflects mounting apprehensions, especially amidst suspicions of government intervention in the market to bolster the yen. This intervention followed Ueda’s restrained remarks during a post-meeting press briefing on April 26.
Ueda’s recent dialogue with Prime Minister Kishida, occurring only seven weeks after their previous discussion, highlights the heightened frequency of engagements among Japan’s leaders, indicative of growing concerns.
With the yen largely resilient to recent intervention efforts, attention now turns to the Bank of Japan. Having initiated its first interest rate hike since 2007 in March, the BOJ faces a challenging decision regarding potential follow-up actions, given the sluggish pace of Japan’s economic recovery.
Ueda reiterated the BOJ’s vigilant monitoring of recent developments, particularly regarding the weak yen’s implications for policy conduct.
Don’t trade all the time, trade forex only at the confirmed trade setups
Get more confirmed trade signals at premium or supreme – Click here to get more signals , 2200%, 800% growth in Real Live USD trading account of our users – click here to see , or If you want to get FREE Trial signals, You can Join FREE Signals Now!
