MNI BRIEF: Easy Policy Needed To Achieve Aims - BOJ Nakagawa

The Bank of Japan must maintain its current easy policy to achieve sustainable price rises accompanied with wage hikes, board member Junko Nakagawa said on Wednesday. Japan’s current headline CPI, 2.6% y/y in July, is largely on the back of higher resource prices and the weak yen, Nakagawa told business leaders in Hakodate City. (See MNI INTERVIEW2: Kuroda’s BOJ To Hold To Policy Stance - Kameda)

She accepted that CPI had stayed above a 2% price target but didn't think it good "to simply achieve the 2% price target.” The BOJ is still looking to boost corporate profits and the improving labor market situation with its easy policy, forming a virtuous cycle that sees both wages and prices rise in a sustainable manner, Nakagawa said,.

JGBs ended the Tokyo session little changed, with the yield on the benchmark 10-year 0.2 bps higher at 23 bps. The yen was last trading at JPY138.40, off the recent highs as the dollar ran into modest selling pressure across the board.