Exchange Currency News
BOJ had an 8 to 1 vote decided to maintain their currency policy and interests rate on 21st. Chairman Kuroda admitted since the trends of CPI keeps weak, there is still a distance to achieve the goal 2% inflation after the meeting. However, he believes it is not right to adjust the goal. The committee believes the currency policies is able to achieve the goal.
The new member of the Policy Committee Okajo voted as the only opposed one. He believes it is impossible to achieve the inflation goal in 2019 only through controlling the yield curve. Kuroda said it is very welcomed for the committee to have multiple opinions. Besides Okajo, everyone showed the opinion. It is positive to the committee.
Kuroda points out that the economy in Japan is in a good performance. However, CPI and the increase of wage is weak is also the truth.
During the conversation of Kuroda, USD to JPY increased from 112.40 to the high point 112.68. Comparing to BOJ, although FED maintains the same interest rate, they are about to reduce the balance sheet. Meanwhile, they indicated they will raise the interest again in the end of the year. It will help the trends of USD increasing. Kuroda said Bank of Japan will keep the strong easing policy until the goal is achieved. They will even do it stronger if it is needed.
BOJ set the controlling of the yield curve as their main policy a year ago. Kuroda said this is still the point of the current policy. To achieve the inflation goal, the purchasing of ETF another way in necessary. With the basic of national debt yield curve controlling and the practicing of QQE, the current currency environment is still easy.
Kuroda also mentioned about the impacts of North Korea. He said the nuclear test and missile launch make the international relationship nervous so far. However, the impacts in finance market are limited. If it is necessary, BOJ will have the right ways to deal with them.