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The Bank of Japan (BOJ) has shifted its monetary policy stance, moving away from its previous dovish forward guidance towards a more data-dependent approach following the end of negative interest rates, according to sources. This change reflects the central bank's adjustment in strategy as it seeks to navigate economic growth and inflation dynamics. BOJ officials, including Governor Ueda and board member Tamura, have made several remarks highlighting the current economic conditions and policy directions. Governor Ueda emphasized that monetary easing has supported economic growth and noted improvements in household sentiment due to expectations of wage hikes, with Japan's economy displaying weakness but moderately recovering. He also mentioned the significant impact of FX moves on the economy and prices but refrained from commenting on specific FX movements. Ueda outlined the central bank's readiness to adjust its bond-buying operations if long-term rates rise sharply and indicated a future gradual reduction in the balance of JGB holdings. Tamura pointed out the no longer necessary aggressive intervention in the bond market, explaining the decision to ditch the Yield Curve Control (YCC) policy. He also discussed the varied impact of FX fluctuations on the economy and stressed that FX stability should reflect economic fundamentals. Both officials underscored the importance of a gradual approach to policy normalization, with Tamura calling for slow but steady policy normalization and noting the risk of inflation overshooting remains low. Ueda highlighted that nominal wages are expected to pick up and real wages to turn positive, contributing to a strengthening positive wage-inflation cycle. Furthermore, Tamura indicated that accommodative monetary policy won't necessarily conflict with the need to raise interest rates, and Ueda affirmed that the BOJ must support the economy with easy policy.
BOJ Must Support Economy with Easy Policy, Says Governor Ueda https://t.co/ZyBjtWGRoh
BOJ must support economy with easy policy, says Governor Ueda https://t.co/D2eFqA7L7F https://t.co/43duxxPPPC
🇯🇵 #Japan | #BOJ’s Hawkish Member Eyes Steady Rate Hikes for Normalization – Bloomberg https://t.co/GEu04q1T4D https://t.co/L9n8vQ5VeG
🔴 TAMURA OF BOJ: ACCOMMODATIVE MONETARY POLICY WON'T NECESSARILY CONFLICT WITH NEED TO RAISE INTEREST RATES
JOKE OF THE DAY! 🏆 WE WILL GRADUALLY REDUCE BALANCE OF $JGB HOLDINGS IN FUTURE - #BOJ Ueda https://t.co/myXFSa4DMQ https://t.co/cpvYlo4W0k
🔴 BOJ GOVERNOR UEDA: WE WILL GRADUALLY REDUCE BALANCE OF JGB HOLDINGS IN FUTURE
BOJ GOV UEDA: AT SOME POINT IN FUTURE, WE WILL LIKE GRADUALLY REDUCE BALANCE OF OUR JGB HOLDINGS
🔴 GOVERNOR UEDA OF BOJ: WE WILL GRADUALLY REDUCE BALANCE OF JGB HOLDINGS IN THE FUTURE
BoJ’s Tamura: Risk Of Inflation Overshooting Sharply, Requiring Rapid Monetary Tightening, Remains Low
BOJ GOV UEDA: IF ECONOMIC, PRICE DEVELOPMENTS WORSEN SHARPLY, WE WON'T RULE OUT TAKING ANY OPTIONS INCLUDING DEPLOYING TOOLS WE HAVE ALREADY USED
🔴 BOJ'S TAMURA INDICATES MOVE TOWARD REDUCING BOND PURCHASES, TIMELINE UNCERTAIN
BoJ Gov Ueda: Revised GDP, Wage Results Played Big Roles In March Move
🔴 BOJ GOVERNOR UEDA: NO LONGER NEED FOR AGGRESSIVE BOND MARKET INTERVENTION, EXPLAINS DECISION TO DITCH YCC
BOJ'S TAMURA: OUR UNDERSTANDING WAS THAT THERE WAS NO LONGER NEED TO AGGRESSIVELY INTERVENE IN BOND MARKET AS WE HAD DONE IN PAST, WHEN ASKED WHY BOJ DITCHED YCC LAST WEEK
🔴 TAMURA FROM THE BANK OF JAPAN: NO LONGER A NEED TO AGGRESSIVELY INTERVENE IN BOND MARKET AS IN THE PAST, EXPLAINS DROPPING OF YCC LAST WEEK
BoJ Board Member Tamura: Impact Of FX Moves On Economy Vary Depending On Each Entity - Won't Comment On Specific FX Moves - Desirable For FX To Move Stably Reflecting Economic Fundamentals
🔴 BOJ BOARD MEMBER TAMURA: FX STABILITY SHOULD REFLECT ECONOMIC FUNDAMENTALS
🔴 BOJ BOARD MEMBER TAMURA DECLINES TO COMMENT ON SPECIFIC FX MOVES
🔴 BOJ BOARD MEMBER TAMURA DISCUSSES THE VARIED IMPACT OF FX FLUCTUATIONS ON THE ECONOMY
BoJ Gov Ueda: Positive Wage-Inflation Cycle Strengthening, Growth In Real Wages Likely To Gradually Turn Positive
🔴 GOVERNOR UEDA OF BOJ: READY TO CONDUCT BOND BUYING OPERATION NIMBLY IF LONG-TERM RATES RISE SHARPLY
BOJ GOV UEDA: FX MOVES HAVE BIG IMPACT ON ECONOMY, PRICES
BOJ GOV UEDA: WON'T COMMENT ON SPECIFIC FX MOVES, LEVELS
🔴 BOJ GOVERNOR UEDA DOES NOT COMMENT ON SPECIFIC FX MOVES OR LEVELS
BOJ Ueda: Nominal Wages to Pick up, Real Wages to Turn Positive "to turn positive"... meanwhile, real wages are the lowest on record thanks to soaring inflation https://t.co/AWbmMIBq5Q
BOJ's Tamura calls for slow but steady policy normalisation https://t.co/aJMAR2VOwU https://t.co/pLehaxMQW3
BOJ GOV UEDA: JAPAN HOUSEHOLDS' SENTIMENT INDICES IMPROVING RECENTLY ON EXPECTATIONS OF WAGE HIKES
🔴 BOJ GOVERNOR UEDA: JAPAN HOUSEHOLDS' SENTIMENT IMPROVING RECENTLY ON EXPECTATION OF WAGE HIKES
🔴 BOJ'S TAMURA NOTES JAPAN'S ECONOMY DISPLAYING WEAKNESS BUT MODERATELY RECOVERING
🔴 TAMURA OF THE BOJ: MONETARY EASING UNDERPINNED ECONOMIC GROWTH
Bank of Japan may be less dovish than markets think - Reuters https://t.co/9vt56VryWq
Bank of Japan May Be Less Dovish than Markets Think https://t.co/sl9o8mhMSr
🇯🇵 ANALYSIS-BANK OF JAPAN MAY BE LESS DOVISH THAN MARKETS THINK Full Story → https://t.co/XsTzD2I3Th The Bank of Japan has ditched its dovish forward guidance in favour of a more "data-dependent" approach to policy deliberations after ending negative rates, sources say,…
Bank of Japan may be less dovish than markets think https://t.co/zXyUFYWWpO https://t.co/bxOEHS8slF