Further comments coming in from Bank of Japan (BoJ) Governor Kazuao Ueda, as he continues to speak on the inflation and policy outlook.
We expect trend inflation to gradually accelerate, so key ahead is to check data and information to see if this will indeed be the case.
One factor we will check is whether pay hikes offered in annual wage talks will materialize, show in actual data.
Another factor we will check is whether service prices will rise reflecting higher wages.
If trend inflation accelerates toward our 2% inflation target, it becomes possible to reduce degree of monetary stimulus somewhat.
If wages do not rise as much as expected or if overseas shocks hit economy, we may need to reduce stimulus at a slower pace, or hold off on reducing stimulus altogether.
If wage-inflation cycle accelerates faster than expected, we might need to reduce stimulus at a faster than expected pace.