BOJ Summary of Opinions: Economy under pressure from virus fallout but showing some signs of bottoming out

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The Bank of Japan (BOJ) is out with its June monetary policy meeting’s Summary of Opinions, noting that the Japanese economy is showing some signs of bottoming out.

Key highlights

“Japan's economy under pressure from virus fallout but showing some signs of bottoming out.”

“Prolonged negative impact from pandemic on global growth, japan economy, looks unavoidable. “

“Delay in economic recovery could destabilize markets, potentially hurt the financial system. “

“Hard to project inflation approaching BOJ’s 2% target in the foreseeable future.”

“If a slump in consumer inflation is prolonged, it could affect inflation expectations.”

“Must guard against the risk of japan returning to deflation as pandemic hitting broad sectors of the economy.”

“BOJ’s current monetary easing framework is a flexible one that can respond to various changes in economic developments.”

“BOJ has laid out sufficient schemes to respond to pandemic fallout, it can carefully examine the effects for time being.”

“BOJ must respond quickly if the need arises to take additional policy measures.”

“BOJ must use all available tools boldly under the current policy framework to protect businesses, jobs, market stability.”

“Policymakers must prioritise minimising risk of deflation, then maximise effects of Abenomics to sustainably achieve annual inflation of around 2%.”

“BOJ must review effect of its monetary policy on economy, as its policies shift to crisis response to efforts to promote economic recovery.”

Market reaction 

The USD/JPY paid little heed to the above Summary, as it kept its range below 106.50 amid broad US dollar weakness and a better market mood. 

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