BoJ’s Himino: Don't think Japan’s economy is in stagflation.

Bank of Japan (BoJ) Deputy Governor Ryozo Himino said on Friday, “don't think Japan’s economy is in stagflation.”

Additional comments

No strict definition on what constitutes stagflation.

Must be vigilant to chance Middle East conflict, if prolonged, could work to weigh on the economy, push up inflation.

We face a dilemma if prolonged Middle East conflict pushes down growth, accelerates inflation.

In general, we will take most appropriate policy from a standpoint of stably hitting inflation target with an eye on scale and length of shock as well as economic environment at the time.

BoJ will scrutinize at each meeting all available data at the time to update our economic, price forecasts and risks as well as the likelihood of durably achieving our price target.

Market reaction

At the press time, USD/jPY is up 0.10% on the day to trade at 159.10, little impressed by these comments.