Must watch capex in face of China, other risks – BOJ's Kuroda

FXStreet (Mumbai) - The Bank of Japan (BOJ) Governor Haruhiko Kuroda is crossing the wires now, speaking the BOJ press conference after the central bank left its policy steady earlier on the day. Apart from his reiteration on Japan’s inflation and growth outlook, the Governor cited a decline in inventory investment as the key reason behind the Q3 GDP contraction. While he made a special note of the recent Paris terror attacks.

Key Quotes:

Economy continues to recover moderately although exports and production are affected by slowdown in emerging economies

Inflation expectations appear to be rising on the whole from long-term perspective although some indicators have recently shown relative weak developments

Expect industrial production to pick up as inventory adjustment proceeds

Exports to rise gradually after being flat for time being

Consumer inflation likely to hit 2 pct around latter half of fiscal 2016 although timing may swing depending on Oil prices

Q3 GDP contraction largely due to decline in inventory investment

Bank of Japan will examine both upside, downside risks to economy and prices, and adjust policy as appropriate

BOJ turned cautious on inflation expectations as break-even inflation rates and other surveys showed weakness

Need to closely monitor how capex plan will be implemented

Machinery orders are on gradual improving trend

Want to monitor if Paris attacks weigh on consumer sentiment

Terror attacks impact on global econ limited