FXStreet (Bali) – Additional headlines from BoJ’s Kuroda are hitting the wires, via Reuters. Governor Kuroda is speaking at a meeting held by the Naigai Josei Chosa Kai (Research Institute of Japan) in Tokyo.
Key Quotes
Strong domestic demand is one reason corporate profits are high
Rises in capex, wages somewhat slow despite companies’ record profits, which shows deflationary mindset not completely dispelled
Japan has become more resilient to slowing exports and overseas economies
Low oil prices causing terms of trade to improve, which is pushing up corporate profits
By maintaining boj’s current stimulus programme, japan can achieve 2 pct inflation but must carefully watch risks such as slowdown in emerging economies
BOJ won’t hesitate to adjust policy if needed to achieve 2 pct inflation at earliest date possible
Weak yen is helping to increase dividends and profits repatriated from overseas
Slowdown in emerging economies, including china, is most important risk to japan’s economic outlook
China’s economic growth likely to heighten from year-end through next year
Important to note that slowing exports and output are not causing labour demand to fall
There is uncertainty on how much fiscal stimulus can lift china’s economic growth given structural problems such as excess capacity
You can say that japan is at full employment
Tight labour market is putting upward pressure on wages
Its unclear how much an expected china recovery will boost growth in other Asian economies given structural changes in china’s economy
Japan may temporarily fall below potential growth rate after 2017 sales tax hike
Daily and weekly measures of prices for food and other goods are clearly rising
CPI basket shows price gains are spreading in a sustainable manner
Output gap expected to improve further due to improving labour market
Utilisiation of capital and labour will continue to improve and place upward pressure on prices
Inflation expectations rising over long term
(Market News Provided by FXstreet)