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00:00LET ' S TALK ABOUT THIS. IT REALLY PUTS PRESSURE ON JAPANESE HOUSEHOLDS WITH A WEAK CURRENCY, BUT THE BOJ IS CONVINCED THAT THIS WILL HELP THE BROADER ECONOMY. THOUGHTS? > > YES. BOJ, CRUCIAL TARGET, AND JAPAN IS NOT IMMUNE TO PRESSURE NOW, PRICES, OTHER COMMODITIES CAN SO WE WILL SEE PROBABLY A CROSS THIS WEEK, BUT IT IS A FAR CRY FROM WHAT THE BOJ TALKED ABOUT WAS THEY WERE TALKING ABOUT STRONG DEMAND COMES SO THE BOJ WILL STAND PAT AND TRY TO LOOK AT WHAT OTHER ECONOMY PRICES GOING ACROSS THE MACRO POINT OF VIEW AND THAT BOJ STILL SPEAKS TO THE IDEA THAT DEPRECIATION OF THE YEN IS ON HOLD FOR THE ECONOMY AND AT THE SAME TIME, THE BOJ HAS RELEASED THE ASSETS OF THE DEPRECIATION BECAUSE IT WILL ONLY BENEFIT EXPORTER AND ACTIVE, GLOBALLY ACTIVE COMPANIES, BUT IT DOES HARM TO THE IT IN GENERAL, SO THERE IS SOME PROVISIONS ON THE PART OF THE BOJ THAT MAY BE GETTING BETTER TO THE DISTRIBUTION AXIS OF THE ECONOMY, BUT UNFORTUNATELY THERE IS A BOJ AND IT CAN DO AND IT IS HISTORY AND THE INFLATION CONCERNS AND THE BOJ WILL ASK WEEK TO THE POLICY AND GOING FORWARD. > > WITH THE PRIME MINISTER ADVOCATING FOR THE NEW FORM OF CAPITALISM AND EQUALITY ACROSS THE ECONOMY, HOW MUCH WILL THE GOVERNMENT HAVE TO DO TO OFFSET THE WEAKNESS OF THE YEN WHICH COULD HURT HOUSEHOLDS? > > YEAH, YOU ARE RIGHT, ACTUALLY COME WE ARE SEEING IN THE AREA OF ECONOMICS, THE BOJ, AND THE INFLOWS OF CAPITAL, AND PROFIT TO LARGE COMPANIES BUT AT THE SAME TIME IT DOES SPILL OVER TO SME ' S AND HOUSEHOLDS, SO THAT IS WHY IT IS GOING TO DO THAT AND TRY TO HAVE A MORE EQUAL SOCIETY AND GOOD INSTITUTIONS AND THAT WOULD BE QUITE YOU HAVE THAT POLICY FOR HOUSEHOLDS IN THE ECONOMY, SO WHAT AT THE IN THE DEPRECIATION AND GOING AGAIN THAT IDEA DISTRIBUTION FOR THE GOVERNMENT WILL COME UP WITH SOME KIND OF MEASURE TO MITIGATE ANY POSSIBLE IMPACT OF THE YEN ON THE PARTICULAR HE PROBABLY INCLUDING SOME NEEDS FOR HOUSEHOLDS IN SME ' S FOR SUPPORT TO MITIGATE ANY PAIN COMING FROM THE DISTRIBUTION OF THE YEN AT THE HIGHER COSTS. > > ED HEARING TO YIELD -- ED HEARING TO YIELD CURVE -- ED HEARING -- ADHERING TO YOUR CURRENT CONTROLS, IS THIS SUSTAINABLE? > > WELL, BETWEEN THE UNITED STATES AND JAPAN THERE IS MUCH DIFFERENCE IN TERMS OF THE ECONOMIC SITUATION, FOR EXAMPLE, THE FEDERAL RESERVE, THE U.S., IS RUNNING MORE THAN THREE TIMES ABOVE THE LEVEL OF THE PRE-PANDEMIC LEVEL OF THE ECONOMY. ON THE OTHER HAND, JAPAN ' S ECONOMY IS OPERATING MORE THAN THREE TIMES BELOW THE PRE-PANDEMIC LEVEL, AND THERE IS SIX SIGNIFICANT DIFFERENCE NOW, SO THERE IS REALLY A GOVERNMENT IN A BOJ ALIGNED TO BE MORE DYNAMIC RATHER THAN INFLATION, SO I THINK IT IS WHAT AUGUST IS GOING TO BE THE BOJ TO CONTINUE TO ACCOMMODATE THE MARKET POLICY AND AT THE SAME TIME I TALKED ABOUT THE FEDERAL RESERVE WILL BE SUCCESSFUL IN TERMS OF CONTAINING INFLATION THROUGHOUT THE REST OF THIS YEAR AND HAVE THAT DONE IN GAUGED. > > THE IMPACT OF THE GYNT ON THE REFLATION RATE PSYCHOLOGY -- THE IMPACT OF THE REFLATION RATE ON THE PSYCHOLOGY, COULD WE SEE JAPAN LAPSE INTO STAGFLATION GIVEN THE DATA AT THE MOMENT? > > WELL, ACTUALLY, THERE IS SOME CONCERN FROM THE CAPITAL MARKETS AND THE PEOPLE WITH REGARD TO THE ABILITY TO DO THAT, BECAUSE WE ARE RUNNING A VERY LARGE, VERY SIGNIFICANT RIGHT NOW, UNUSUAL ECONOMY BY JAPAN ' S ECONOMY, AND WE USED TO BE HAVE MUCH MORE LIQUIDITY BUT ONCE THIS STARTED TO DEPRECIATE THEN IT STRENGTHENED THE INDUSTRY AND IT WAS SIGNIFICANT, BUT THIS TIME AROUND, IT MAY NOT HAPPEN, SO WE MUST BE A MEDIUM-TERM IMPLICATION OF WHAT WE CAN DO RIGHT NOW TO THE ECONOMY WHICH TURNS OUT TO BE A COMPETITIVE INDUSTRY AND THEN WE TRIED TO MORE DO THAT AND THE ENVIRONMENTAL GLOBAL ECONOMY, SO THAT IS ACTUALLY THE MEDIUM-TERM THAT WE HAVE CONCERN, BUT FOR THE TIME BEING, AS I MENTIONED, MUCH MORE IMPORTANT FACTOR WOULD BE A POLICYMAKER RIGHT NOW TO ABSTAIN FROM THE RECENT RECOVERY FROM THE SITUATION. > > IF THE BOJ BEING MORE OF ACTIVE IN THE BOND SPACE, BUYING JGB ' S CONSISTENTLY, WHAT IS THE IMPACT ON THE MARKET MECHANICS? > > WELL, I THINK THAT IS A GOOD QUESTION, BUT THE RELATION OF THE PRIMARY PRIORITY FOR THE BOJ IS TO TRY TO ACHIEVE THE INFLATION ON A SUSTAINABLE BASIS IN THE SO-CALLED CURB CONTROLS WITH THE MEASURE OF THE BOJ IN GAUGING TO TRY TO ACHIEVE THAT TARGET, SO AT THE SAME TIME, SO IN SOME SENSE, THE MARKET IS KIND OF A PREDICTING MARKET FOURS AND THE BOJ READS THAT AND WE ARE SEEING THE SECOND PRICE OF THE MARKET, BUT STILL THE MARKETS ARE AT THAT LEVEL AND JGB SOME POSSIBLE BENEFITS OF EMERGING MARKET FORCES GOING FORWARD.

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Mizuho's Momma on BOJ Policy Outlook

Kazuo Momma, Executive Economist at Mizuho Research Institute, discusses his outlook for the Bank of Japan's policy. He speaks with Shery Ahn and Haidi Stroud-Watts on "Bloomberg Daybreak: Australia". (Source: Bloomberg)

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