BoJ’s Noguchi: Main scenario is that future rate hikes are likely to be slow

Bank of Japan (BoJ) board member Asahi Noguchi said on Thursday that the “main scenario is that future rate hikes are likely to be slow, but that depends on economic data.”

Additional quotes               

Will take into account cost-driven inflation and policy adjustment if higher wages lead more to higher prices.

It will take a considerable amount of time till positive cycle takes root.

The likelihood of reaching 2% inflation target in about 2 years is rising.

Some big firms are benefiting from weaker Yen.

Prolonged Yen weakness could have various impacts including on wages and prices.

Those factors will have to be taken into account when deciding monetary policy.

BoJ will cautiously monitor the likelihood of achieving 2% trend inflation.

Cannot say whether there will be another rate hike this year.

Unexpected strength in the US economy is one of the reasons behind Yen’s weakness.

It is natural for the BoJ to respond if wage hikes, labour shortages intensify and increase price pressure.

Market reaction

At the press time, USD/JPY is consolidating its bounce near 154.30, still down 0.06% on a daily basis.