In a speech today, BoJ Deputy Governor Shinichi Uchida emphasized the necessity of maintaining monetary easing with the current policy interest rate “for the time being”, citing “extremely volatile” recent developments in both Japanese and global financial and capital markets. Uchida assured that BoJ is monitoring these developments with “utmost vigilance” and will adjust monetary policy as appropriate.
Uchida reiterated that if the outlook for economic activity and prices is realized, BoJ would “continue to raise the policy interest rate.” Howeer, he noted that “significant movements in stock prices and foreign exchange rates since last week” are particularly relevant in shaping this outlook.
Furthermore, Uchida pointed out that the recent correction in Yen’s depreciation has reduced the “upside risk to prices arising from higher import prices.” This adjustment in Yen’s value “affects the conduct of monetary policy.”
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