MNI BRIEF: Ueda Says BOJ Unable To Predict US Soft Landing
MNI (TOKYO) - Bank of Japan Governor Kazuo Ueda said on Tuesday the BOJ sees great uncertainty over the timing and ability of the U.S. to achieve a soft-landing.
This uncertainty is driving unstable markets, he added. "We cannot figure out in advance when and how the U.S. economy achieves a soft-landing,” Ueda told reporters in Osaka City.
The BOJ must carefully watch U.S. economic data and assessments or comments by Federal Reserve officials to gauge the probability of a soft-landing, Ueda noted, citing the outlook for the U.S. economy as a significant risk factor for the Japanese economy and the Bank’s monetary policy.
The BOJ will likely manage monetary policy, taking the impact of forex moves on the outlook for economic activity and prices, he added.
Ueda also attributed recent low long-term interest rates in Japan to the drop of long-term interest rates in the U.S. and to uncertainty over its economy. Accumulated FX positions seemed to have unwound considerably, he said, noting he did not know the exact size of the trades.
The comments followed the BOJ board's decision to hold the policy rate unchanged at 0.25% last week. (See MNI BOJ WATCH: Ueda Says BOJ Has Time To Watch Price Moves)