BoJ preview: A still negative neutral rate calling for pause notwithstanding weak Yen
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After the Bank of Japan (BoJ) terminated the key non-conventional monetary policy tools in March, namely the negative policy rate and the yield curve control (YCC), evidence on a strengthening virtuous circle between inflation and wages has been limited. However, real wages -which fell by -1.8% YoY in February - are unlikely to turn positive soon. Furthermore, services inflation excluding imputed rent softened to +2.9% YoY in March from +3.1% YoY (Chart 1). On the other hand, goods inflation remained elevated at +3.3% YoY during the same period on the back of higher food prices and smaller energy subsides. This is partially due to the weak Yen given Japan’s reliance on imported energy and food.
BoJ preview: A still negative neutral rate calling for pause notwithstanding weak Yen
BoJ preview: A still negative neutral rate…
BoJ preview: A still negative neutral rate calling for pause notwithstanding weak Yen
After the Bank of Japan (BoJ) terminated the key non-conventional monetary policy tools in March, namely the negative policy rate and the yield curve control (YCC), evidence on a strengthening virtuous circle between inflation and wages has been limited. However, real wages -which fell by -1.8% YoY in February - are unlikely to turn positive soon. Furthermore, services inflation excluding imputed rent softened to +2.9% YoY in March from +3.1% YoY (Chart 1). On the other hand, goods inflation remained elevated at +3.3% YoY during the same period on the back of higher food prices and smaller energy subsides. This is partially due to the weak Yen given Japan’s reliance on imported energy and food.