Ueda Press Conference Generally In Line With Expectations

BoJ Governor Ueda’s press conference reflected caution when it came to the idea of further tightening, although he believes that the idea of slow possible rate hikes is appropriate.

• Looking ahead, Ueda doesn’t have any preconceptions re: the ordering of any additional rate hikes & reduction of JGB purchases.
• Policy settings are set to remain accommodative with inflation below 2%. Ueda stressed that such a stance is needed.
• The BoJ doesn’t seem to expect SME wage hikes to match what was seen at larger firms.
• Uncertainty re: consumption also remains evident.
• Ueda also played down the idea that today’s moves can be called “normalisation.”
• He pointed to Taylor rule considerations, along with some wariness re: interest rate spikes.
• On balance sheet matters Ueda wouldn’t be drawn on specifics re: timing of any reduction of ETF holdings.
• While the Bank does not target FX rates Ueda noted that it will consider altering its policy settings if the JPY impacts the economy/inflation.
• All in all, the press conference seemed relatively in line with wider expectations in place ahead of the decision.