BOJ Ueda says YCC policy side effect risk is of greater market, including FX, volatility

<p>Bank of Japan Governor Ueda, headlines via Reuters:</p><ul><li>
When BOJ talks about side-effects of YCC, it includes risk of
triggering volatility in markets including for FX</li><li>Desirable for FX to
move stably reflecting fundamentals</li><li>If YCC heightens FX
volatility, that is seen as among side-effects of our policy, when
asked BOJ views sharp yen falls as side-effect of YCC</li><li>Recent high
inflation driven by rising import prices and domestic factors, but
latter still somewhat weak</li><li>Hope to see overall
inflation slow as cost-push factors dissipate but in medium- to
long-run, want to see inflation gradually accelerate</li></ul><ul><li>
Well aware underlying price rises hurting households, companies but
don't expect this to last very long</li><li>When looking at
trend inflation there is still some distance toward 2%, which is why
we are continuing with massive monetary easing</li><li>We are continuing to
buy huge amounts of govt bonds via market operations so 10-year JGB
yield does not too much above 1%</li></ul>

I'm not reading anything here from Bank of Japan Governor Ueda to indicate any reduction in easy policy is imminent.<p>–</p><p>More market and FX volatility?</p><figure data-media-><img src="https://images.forexlive.com/images/not%20that%20anything%20wrong_id_c8c3fc0f-421c-4c7b-a74a-9ba08ea21461_original.jpg" alt="not that anything wrong" width="568" height="423" wrapper-="wrapper-" data-src="https://images.forexlive.com/images/not%20that%20anything%20wrong_id_c8c3fc0f-421c-4c7b-a74a-9ba08ea21461_original.jpg" /></figure>

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