Bank of Japan deputy governor, Uchida spoke publicly in Hakonde:
- BoJ will not raise rates unless the market is stable
- Market is buoyed by US data, US economy should experience soft landing, however
- Path for interest rates may depend on market situation
- Policy will remain defensive, even with several hikes
- Real interest rates still strongly negative
- Financial conditions remain strongly accommodative
- Personally thinks markets will calm down and think carefully about further moves due to the situation
- Economically than has not changed, only market conditions show that one must be prudent
- Consumer spending remains strong, but one should be careful about it
The market expects less than a 10bp hike this year. On the other hand, expectations for a hike have risen marginally since yesterday. A nearly full hike is priced in by January. Source: Bloomberg Finance LP, XTB
USDJPY is clearly weakening after Uchida's statement. The JPY is already losing 1.7% against the dollar. On the other hand, the yen's weakening has diminished as of 06:45 a.m. USDJPY is reacting to support at 146.5.
