Today it was announced BoJ opinion summary of its monetary policy meeting on March 17 and 18, 2022.
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Rising inflation could weigh on economic growth abroad.
The concerns about uncertainty around the risk of developments in Ukraine could weigh on the Japanese economy.
The rising costs of raw materials and food, coupled with geopolitical risks could inflict strong downward pressure on the economy.
It is likely that Japan’s consumer inflation will clearly accelerate from Aprilit can move about 2% for some time.
Inflationary pressure will increase improvements in the output gap, raising inflation expectations.
It is likely that consumer inflation to hover around 2% in the first half of fiscal 2022but could be lowered if commodity prices decline.
More companies seem to be passing on higher costs to consumers.
Rising costs of imported raw materials are unlikely to lead to a sustained rise in consumer inflation.
BoJ must maintain monetary easingas Japan is unlikely to see inflation continually exceed 2%.
The BoJ should not focus on the forex marketthe price of raw materials moves on its own, but on how they could affect the economy and prices.
BoJ must respond flexibly without hesitation if the 2% inflation target is under threat, as rising commodity prices could hurt the economy.
It is important to think about various possibilities and how to respond with monetary policy, taking into account the recent changes in the economic evolution of prices.
On the BoJ’s opinion summary
This report includes the BOJ’s outlook for inflation and economic growth. It takes place 8 times a year, approximately 10 days after the Monetary Policy Statement is published.
Source: Fx Street
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