UEDA’s Boj warns of global uncertainty, and markets keep a guess at the next height

By playing Kihara

Osaka (Reuters) -Japan’s ruler Kazo Oda said that inflation was on the right path to strike the bank’s goal periodically, but he warned of the universal uncertainty that could discourage companies from raising wages, leaving himself free hand to raise interest rates in October.

UEDA reiterated the central bank’s design to continue to raise interest rates that are still low if the economy and prices are in line with its expectations.

But he said that there were many cases of uncertainty surrounding Japanese economic expectations, such as signs of weak labor market in the United States and the expected influence of the United States Definitions On the profits of Japanese companies.

“If the uncertainty about outpatient economies and commercial policies remain high, companies may focus strongerly on lowering costs and their efforts may be weakened to reflect prices in wages.”

Oda said: “The future path of the American economy and monetary policy behavior can significantly affect Japanese economy and prices.” “Therefore, we will continue to monitor the situation closely,” he added.

The Japanese yen weakened 0.2 % to $ 147.60 for the US dollar after UEDA, as some players in the market interpreted them as they reduce the possibility of the October average.

“There was no clear change in BOJ’s communication that would indicate that he was trying to lay the foundation to raise the October rate,” said Shotaro Mori, senior economists at SBI SHINSEI Bank.

He said: “If the impact of the customs tariff is intensifying from now on, then the important thing is to consider the difficult data on economic growth in the third quarter of the third quarter and the profits of companies,” expecting that the rise in December is now more likely than October.

The statements came in the wake of the closure of the US government that started on Wednesday, which may delay the issuance of a large part of the economic data and the BOJ’s decision.

Players on the market were closely monitoring UEDA’s comments on any evidence for when BOJ would resume a course in the price that was temporarily stopped due to the uncertainty about the economic repercussions of the American definitions.

The Board of Directors of the Falcons at the BOJ meeting in September, and calls for the increase in the short -term interest rate by the Dovish Policy Maker to the market to more than 60 % opportunity for the bank to rise to 0.75 % of 0.5 % at the upcoming policy meeting on October 29.

Oda said that the Japanese economy has been wandering in the American definitions so far, as many companies have been armed with high profits in the past.

He also said that the basic inflation, or the wide price direction with the exception of one -time factors, will accelerate towards the Boj goal – to remove the previous reference, will be briefly disrupted in a sign of the last increasing pressure of high food costs.

Oda said: “Due to the intensity of labor lack and high to long -term inflation, the basic inflation is likely to accelerate with actual inflation,” Uda said.

The note compared to the language in the BOJ policy statement in September, which said that the basic inflation “will be slow due to the slowdown, before gradually increased.”

BOJ justified slowly in high rates of prices on latent inflation, or high prices driven by domestic demand as measured by different indicators, remains less than its 2 % goal.

“Depending on the behavior of companies and wages, it can continue to rise in prices longer than expected,” said Uda. But he added that the high prolonged food prices can harm consumption and pay inflation.

Oda said: “We will carefully study the possibility of our founding line scenario, as well as the risks of upward and negative aspect,” in a decision on monetary policy.

BOJ team ended the huge stimulus program for ten years last year and raised prices to 0.5 % in January, it seems that Japan was on the threshold of hitting the 2 % inflation goal.

While consumer enlargement has exceeded 2 % for more than three years, UEDA has emphasized the need to walk with caution in increasing borrowing costs to ensure high prices with wage gains and strong domestic demand.

(The red report of Lika Kehstal