Japan yet to see positive wage-inflation cycle become embedded enough.

Appropriate to patiently maintain easy policy.

If needed BoJ will take additional easing steps.

Steps BoJ took in October to make YCC flexible not aimed at laying the groundwork for policy normalisation.

Japan's inflation expectations heightening moderately.

See risk to Japan's inflation outlook skewed to upside.

Companies starting to shed deflationary price-setting practices

Hard to predict now whether wage hikes will continue next fiscal year.

Given high uncertainty over global economic outlook, there is risk Japan's inflation, wages face downward pressure.

If positive wage-inflation cycle strengthens, that could further push up prices.

If long-term rates rise sharply above 1%, that would push up real interest rates and could cool economic activity.

Steps BoJ took to make YCC flexible have mostly removed market distortions.

Seeking to forcefully curb interest rates could cause speculative moves in financial markets.