In its quarterly regional economic report published on Thursday, the Bank of Japan (BOJ) is expected to reflect uncertainty about how US tariffs will affect local businesses.
Additional conclusions
Regarding the impact of the commercial policies of each country, some regions said that companies were postponing or reviewing their investment plans.
Many regions said that the impact of US tariffs on exports and production is limited for now.
Many regions said that companies were concerned about the decrease in demand due to the increase in sales prices in the US and the deceleration of the global economy.
Many regions said the salary increases were at high levels this fiscal year in a wide range of industries.
Some regions cited companies that could cut the winter bonds if the profits do not reach the estimates.
As for the setting of wages next year, some companies expressed concern about further increasing wages, while others saw the need to continue increasing salaries to retain talent.
Many regions said companies continued to increase prices to transfer supplies, labor and distribution costs.
Some regions saw companies postponing price increases as consumers reduce spending.
Many regions said the consumption of services remained firm.
Market reaction
At the time of writing, the USD/JPY torque is quoting 0.01% down in the day, to operate in 146.32.
BANCO DE JAPAN – FREQUENTLY QUESTIONS
The Bank of Japan (BOJ) is the Japanese Central Bank, which sets the country’s monetary policy. Its mandate is to issue tickets and carry out monetary and foreign exchange control to guarantee the stability of prices, which means an inflation objective around 2%.
The Bank of Japan has embarked on an ultralaxa monetary policy since 2013 in order to stimulate the economy and feed inflation in the middle of a low inflation environment. The bank’s policy is based on the Quantitative and Qualitative Easing (QQE), or ticket printing to buy assets such as state or business bonds to provide liquidity. In 2016, the Bank redoubled its strategy and relaxed even more policy by introducing negative interest rates and then directly controlling the performance of its state bonds to 10 years.
The massive stimulus of the Bank of Japan has caused the depreciation of the Yen in front of its main monetary peers. This process has been more recently exacerbated due to a growing divergence of policies between the Bank of Japan and other main central banks, which have chosen to abruptly increase interest rates to combat inflation levels that have been in historical maximums. Japan Bank’s policy to maintain low types has caused an increase in differential with other currencies, dragging the value of YEN.
The weakness of the YEN and the rebound in world energy prices have caused an increase in Japanese inflation, which has exceeded the 2% objective set by the Bank of Japan. Even so, the Bank of Japan judges that the sustainable and stable achievement of the 2%objective is not yet glimpsed, so an abrupt change of current monetary policy seems unlikely.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
