BOJ board member out on the wires

  • wholesale prices expected to continue falling for some time due to commodity prices
  • consumer prices likely to be around zero for a time due to oil prices
  • labour shortages and supply-side constraints tend to constrain economic recovery
  • economy likely to emerge from recent pause, grow above potential FY 2016
  • doesn't think Japan is in recession
  • overseas economies are major downside risk for Japan

Notice how everyone seems to blaming everyone except themselves?

USDJPY 123.48 with supply at 123.50 still providing a cap

  • July-Sept GDP could turn out to be positive
  • expects capex to peak out in FY 2017 given current growth expectations
  • if markets become concerned about limits of BOJ;s JGB purchases risk premium could rise
  • sees an increasing risk that Japan investors will want to hold more JGBs, which could make QQE more difficult
  • if long term rates rise due to worries about BOJ JGB purchases, impact could be serious
  • reducing BOJ's JGB purchases could reduce risks of QE

Glass half-empty still for well-known policy dissenter who has voted consistently for less QE