Mr Iwata’s (probably last)speech on 31.01.2018 before the end of his term in March

  • Boj must continue with powerful monetary easing
  • BOJ YCC is the most effective policy with the minimum costs
  • Should maintain the policy as long as it’s not sure of the effect other options
  • Easing policy helps improve companies’ productivity
  • Trying To Restore Fiscal Health Too Hastily May Slow Growth, Make Achievement Of 2% Inflation Difficult
  • Price rises remain weak as firms,households still believe inflation won’t rise much
  • Companies expected to use some of their savings to boost capex and wages
  • Hopes government pursues deregulation and reforms to remove barriers and hamper competition
  • Pretty sure he will not be re-appointed as Deputy governor of BOJ after his term ends
  • in the meantime BOJ upped his 3-5 year JGB buying from 300 to 330bn JPY today
    Offers to buy ¥250B in 1-3 year JGBs vs ¥250B prior
    Offers to buy ¥330B in 3-5 year JGBs vs ¥300B prior
    – Offers to buy ¥190B in 10-25 year JGBs vs ¥190B prior
    – Offers to buy ¥80B in over 25 year JGBs vs ¥80B prior
    USDJPY had a quick spike on this to 109.10 but already back to 108.85 as the rise in the bond buying wasn’t very impressive
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