The Governor of the Bank of Japan, Haruhiko Kuroda, said on Thursday that the Japanese economy is picking up and that it is likely to recover as the impact of supply constraints and the pandemic subsides.
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The Japanese economy is likely to recover as the impact of supply constraints and the pandemic subsides.
Uncertainty about the Japanese economy is very high.
You have to be attentive to the impact of currencies and market movements on the economy and on prices.
The BoJ will maintain an easy monetary policy to achieve sustainable and stable inflation of 2% accompanied by wage growth.
Japan’s consumer inflation likely to return below 2% next fiscal year.
Consumer inflation in Japan has recently exceeded 2%, but is almost exclusively due to companies passing on higher import costs to consumers.
Space must be left for a political response to ensure that Japan does not return to deflation.
we could be watching slight signs of a change in cautious corporate sentiment that was behind the prolonged deflation.
The merits of the current BoJ policy outweigh the costsbut are aware of the need to take into account the costs of prolonged easing.
The pace of Japan’s negative interest rate hike will be one of the key factors when the BoJ discusses the exit strategy.
Another factor is how to adjust the BoJ’s huge balance sheet.
We are not at a stage where we can immediately discuss and work out the details of the exit strategy.
Source: Fx Street
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