Premature to tweak monetary policy now as service prices remain low

Bank of Japan (BoJ) Board Member Toyoaki  Nakamura said on Wednesday, it is “premature to tweak monetary policy now as service prices remain low.”

Additional comments

Not sure now is right timing to conduct a review of monetary policy framework.

Once there are brighter prospects on outlook, BoJ can of course discuss policy normalization.

It may take quite some time for Japan to achieve wage hikes.

It is true BoJ’s prolonged easing is weighing on bank profits.

BoJ’s easing helped reverse excessive yen rises after Lehman crisis, put end to deflation.

Benefits of monetary easing still exceed the costs.

Don’t think change in BoJ’s leadership next April would affect timing of tweaking monetary policy.

Timing for review of monetary policy must be decided based on economic, financial changes at the time.

Market reaction

USD/JPY is extending gains above 137.00 on the above comments, currently trading at 137.35, up 0.22% on the day.

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