• Will continue to communicate closely with the government
• Need to pay attention to possibility that higher oil prices could affect inflation more than in 2021-22
• Cannot say how long it would take to judge whether energy supply shocks affect underlying prices
• No comment on how Middle East conflict is affecting forex levels
• But carefully watching the impact of forex movements on prices
• Personally want more time to decide how Middle East conflict will impact prices, be it upward or downward
• Will reexamine our central view on prices at the April meeting next

Overall, I don’t see anything that really stands out from Ueda thus far. The BOJ had little choice but to keep interest rates unchanged today and his comments reflect that steadier choice. The fact is that the central bank, much like its peers, need time to digest and make sense of the US-Iran conflict and how that will impact the inflation outlook.

While the BOJ might on the rate hike train, they want to move forward with wage-driven price pressures. Higher oil prices are the opposite of that, driving up cost-push inflation instead. So, there’s that to consider.

As for the Japanese yen in itself, it remains a complicated issue with USD/JPY near the 160 mark. Not least because Japan is one of the biggest losers in the whole US-Iran war, being a bystander victim.