BOJ Upping the Ante on December 18th
ECB Room for One More?
BOJ Upping the Ante on December 18th
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Atsushi Mizuno, Bank of Japan Board Member
If the BOJ raises rates in the near future, we need to be somewhat confident that the economy is moving in line with its outlook report. We have had some weakness in recent economic indicators, but it is not true that we cannot raise interest rates until all economic indicators are strong. December 5, 2006
Kiyohiko Nishimura, Bank of Japan Board Member
If expected price gains remain low and stable, corresponding adjustments to nominal interest rates will be done 'cautiously and gradually,' which also means we have leeway to enable it. When I say 'cautiously and gradually,' I don't have any timeframe in mind. It means we will make appropriate adjustments at the time while closely examining various economic indicators in an open-minded way and looking ahead into the future. December 6, 2006
Hiroko Ota, Japanese Economics Minister
Basically, our understanding on the current state of the economy is the same. There is a delay in the pace at which the positive effects in the corporate sector are filtering through to the household sector, but we hold the view that the economy is recovering and will continue to recover next year. December 5, 2006
Although the economy shows some signs of slowing, there is no worry about the economy going back to recession or hitting a soft patch. December 8, 2006
Koji Omi, Japanese Finance Minister
Consumption is somewhat stalling but as a whole there is no change in the trend of steady growth in the economy. December 8, 2006
ECB Room for One More?
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The ECB left the door open for further policy tightening in 2007 following their hike last week to 3.50%:
Jean-Claude Trichet, European Central Bank President
After today's increase, our monetary policy continues to be accommodative, with the key ECB rates remaining at low levels, money and credit growth strong, and liquidity in the euro area ample by all plausible measures. Today's decision will contribute to ensuring that medium to longer-term inflation expectations in the euro area remain solidly anchored at levels consistent with price stability. Such anchoring is a prerequisite for monetary policy to make an ongoing contribution towards supporting sustainable economic growth and job creation in the euro area. December 7, 2006
Axel Weber, European Central Bank Council Member
The still low level of interest rates leads to a certain demand for credit? For us the current dynamic growth in money supply, in particular the very dynamic growth in loans, is a sign of mid- to long-term inflation risks. December 7, 2006
However, political involvement in the euros value is still a big debate:
Dominique de Villepin, French Prime Minister
The central bank is primarily responsible for fighting against price increases, for fighting against inflation. We must clarify the responsibility in the area of exchange rate policy?we must better coordinate work between the Eurogroup and the European Central Bank. I think we must put things back on the table, we should redefine each player's role. There is a political responsibility to affirm." December 11, 2006
Joaquin Almunia, EU Economic and Monetary Affairs Commissioner
There is no need to be alarmist over the current strength of the euro against the US dollar. December 5, 2006
Peer Steinbruck, German Finance Minister
Any political intervention over the current high level of the euro against the dollar must be avoided. December 5, 2006
