MNI BRIEF: U.S. Risk Falling, Uncertainty Remains - BOJ’s Ueda
MNI (TOKYO) - Bank of Japan Governor Kazuo Ueda on Thursday said the degree of risk surrounding the Japanese economy, such as that driven by the U.S., had fallen slightly, but uncertainty remained high.
“The fog of downside risk to the U.S. economy is slightly clearing more than before,” he said, voicing concern fresh risks could emerge after the U.S. presidential election on Nov. 5.
The need to use language on having enough time to gauge risks had reduced, Ueda added, due in part to better U.S. economic data. But the BOJ must monitor other risks, he continued. Policymakers will consider rate hikes at each meeting, he added.
The BOJ will also weigh the probability that Japan meets its baseline scenario at each meeting, Ueda noted, adding the Bank has no pre-set course of timing to raise the policy rate.
The BOJ board held its policy rate steady today, in line with expectations. (See MNI BOJ WATCH: Board To Hold, Monitor Markets, U.S. Economy)
Pointing to the weaker yen, he cautioned fx moves will likely affect prices more than in the past and the BOJ will examine the drivers of the weaker currency and its impact on inflation.