Increase in capex to have positive impact on prices – BOJ’s Iwata

By FXStreet FXStreet (Mumbai) – Bank of Japan (BOJ) Deputy Governor Kikuo Iwata was on the wires last minutes, addressing a meeting with business leaders. Mr. Iwata noted in his speech, noted that the central bank expects 2% price target to be achieved by second half 2016. He also added that the BOJ is prepared to adjust policy if the underlying trend in inflation is seen at risk.

Key Quotes:

Effect of China’s slowdown appearing in Japan’s exports, output

Positive economic cycle remains intact both for households, companies

Exports, output to gradually increase as global growth picks up

Must be mindful that downside risks to Japan exports, output will remain high for time being

Price trend improving steadily

Other puzzles include suppressed employment to population ratio

Expect to see clearer signs of increases in capex, private consumption gradually pushing up prices

Expect Japan inflation to hit 2 pct around latter half of fiscal 2016

Biggest risk to Japan’s economic outlook, price trend is further slowdown in emerging economies

Bank of Japan will adjust policy without hesitation if such risks lead to deterioration of underlying trend in inflation
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Source:: FX Street