BoJ board member Adachi is giving a speech in Kumamoto. The headlines that have filtered out so far lean slightly dovish, at least relative to expectations or risks that we see further tightening/policy adjustment from the BoJ at the upcoming policy meeting in June.

• Adachi states that financial conditions must be kept accommodative, along with negative real rates. This is to ensure the price goal is met.
• Adachi added that while certainty to attaining the price goal was rising, it was not a given it would be met.
• The board member stated a premature rate hike should be avoided, while noting a rapid round of rate rises would risk breaking the local economy. It will be desirable to cut bond purchases at some stage, but is this likely to be done in stages.
• Still, Adachi stated that if interest rates were fixed at the zero level until inflation is durably at target, the central bank may get behind the curve and be forced to rise rates more rapidly (which in turn would hurt the economy).
• Inflation is expected to pick up as Japan moves from summer into Autumn. The weak yen may prompt a stronger than expected rebound in inflation.