Ueda has got the situation under control and managed to orchestrate a whole string of positive market developments on the back of his monetary policy mix. There are no major reasons to change course. Steepen the JPY curve slowly, while accommodating the short-end.
Ueda giving an exclusive interview for the first time since April trying to talk up the JPY but will he succeed? We doubt it. The global steepener pressure remains intact.
The Bank of Japan did indeed move the needle as the big spike in the short-term inflation forecast provided them with an excuse. The big question is whether the move will lead to more or less printing? And whether the packaging is dovish enough to keep markets calm?
The Bank of Japan left us in the dark on whether monetary policy is now on autopilot for 1-1.5yrs, while a committee figures out how to exit the YCC program. Changes to the statement suggests that the policy CAN be changed.
Bank of Japan will meet later this week and Ueda provided some clarity on the prerequisites for a YCC hike earlier. Is a YCC-hike off the table near term? And could BoJ surprise with a deposit rate hike this week
We have been up early to watch the hearings in Japan, but very little new was brought to the table. Here are the take-aways from the hearings in Japan.