BOJ dep gov Himino says will maintain easy policy until sustained stable 2% CPI achieved

<p>Bank of Japan Deputy Governor Himino:</p><ul><li>
BOJ will patiently maintain easy policy until sustained, stable
achievement of price target is in sight</li><li>Japan's financial
system is likely resilient enough to weather stress from transition
to higher interest rates</li></ul><ul><li>
If we do not get the timing exit procedures wrong, the impact of a
positive wage-inflation cycle will likely benefit wide range of
households, companies</li></ul><ul><li>
Must make appropriate decision on exit timing, procedure by
scrutinising wage, inflation developments</li><li>
BOJ must achieve
situation where inflation slows ahead, but not too much</li></ul><ul><li>
Japan is seeing steadily changes in price, wage behaviour</li></ul><ul><li>
Solid progress is observed in the transformation of firms' wage- and
price-setting behaviour</li><li>
price rises beginning to affect
wages</li><li>
pass-through from wages to inflation is also returning
somewhat</li><li>
without virtuous cycle between wages and prices, japan
will most likely revert to the deflationary state in the past</li></ul><ul><li>
When Japan returns to an economy with positive interest rate, that
could improve households' balance as a whole</li><li><p>
If inflation expectations have heightened, that would mean impact of
rise in real interest rate could be smaller than that of nominal rate</p></li></ul><p>USD/JPY is little changed around 147.25</p>

This article was written by Eamonn Sheridan at www.forexlive.com.