BOJ Summary of April meeting – “yen’s depreciation works positively”

Bank of Japan summary, Headlines via Reuters:

  • weak yen is positive for economy when output gap is still big, trend  inflation  is very low
  • must be vigilant to chance of unexpected tail risk triggered by Ukraine crisis
  • Japan’s inflation excluding energy remains very low, situation different from US, Europe
  • Japan’s consumer inflation likely to move around 2% for time being from April, but price rise exceeding 2% won’t be sustainable
  • hard to achieve the BOJ 2% inflation target as the expected rise in inflation is driven by temporary factors
  • its crucial that wage hikes, being seen at present by big firms, to spread to small firms in order for broader wages & inflation to rise sustainably
  • this is a risk prices may come under downward pressure if medium & long term inflation expectations do not rise sufficiently
  • the Bank of Japan much continue to support the economy with its current powerful monetary easing

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