Ueda: Move Towards Normalisation Possible If Inflation Goal Met In Sustainable Manner

Ueda flags the potential for a move towards normalisation if inflation is stably at the 2% mark, although he previously stressed that a continuation of the Bank's easing settings will be required to generate that dynamic, while stressing the need for further wage growth. Ueda also indicated that he believes that CPI pressures will have peaked in January, with some positive developments emerging on that front.

• Ueda has also pointed to a 2% inflation target as the global standard, while playing down the need for any tweaks to the wording surrounding the Bank’s inflation target (a dovish development given expectations for a tweak to the rigidity of the government-BoJ accord on inflation).
• Ueda also outlines his openness to a broader policy framework review if others on the board are supportive of such a step.
• He goes on to note that there are various possibilities re: the future of YCC, although doesn’t want to be drawn on specifics of that matter for now.
• He also noted that the sustainability of YCC needs to be considered if continued easing is required.
• He identified a move in the interest rates paid on reserves parked at the BoJ as a likely step when it comes to the normalisation of policy settings at the Bank.
• He has also fagged that the BoJ will stop it's huge bond buying if inflation goals are met, although stressed that active JGB sales will not take place.