BoJ Monetary Policy Meeting Minutes: Solvency problems for some firms and financial system stability
The Bank of Japan minutes revealed that a few members said prolonged damage to economy from pandemic could lead to solvency problems for some firms, affect financial system stability.
Members agreed must ease without hesitation if needed, with eye on impact of pandemic on economy.
One member said must examine whether current policy framework was sufficient, act promptly if action was needed.
One member said close, appropriate coordination between fiscal, monetary policies crucial.
Members agreed there was risk financial intermediation could stagnate if financial institutions' profits remain under prolonged strain.
Members agreed there was chance financial system vulnerability might heighten.
One member said BoJ must look more deeply into how monetary policy could be shaped in 'with-corona' world.
One member said must scrutinise how monetary policy affects business management from medium-term perspective.
Govt representative said hope boj keeps in close contact with govt in achieving early economic recovery via appropriate monetary policy.
A few members said must retain cautious view on pace of overseas economic recovery.
A few members said must be on alert to risk Japan, other countries, might see a renewed resurgence in coronavirus infections.
One member said a resurgence in infections would delay timing of economic recovery.
One member said impact of pandemic, if prolonged, could lead to job losses, hurt household income and spending.
A few members said prolonged damage to economy from pandemic could lead to solvency problems for some firms, affect financial system stability.
The Bank of Japan publishes a study of economic movements in Japan after the actual meeting.
These meetings are held to review economic developments inside and outside of Japan and indicate a sign of new fiscal policy.
Any changes in this report tend to affect the JPY volatility. Generally speaking, if the BoJ minutes show a hawkish outlook, that is seen as positive (or bullish) for the JPY, while a dovish outlook is seen as negative (or bearish).
Market implications
There is a growing sentiment of insolvency problems in the market.
The bank indexes are bleeding to extraordinarily low levels, such as the KRB.
More here: USD/JPY testing bear's commitments at a critical resistance
Reprinted from FXStreet,the copyright all reserved by the original author.
Disclaimer: The content above represents only the views of the author or guest. It does not represent any views or positions of FOLLOWME and does not mean that FOLLOWME agrees with its statement or description, nor does it constitute any investment advice. For all actions taken by visitors based on information provided by the FOLLOWME community, the community does not assume any form of liability unless otherwise expressly promised in writing.
FOLLOWME Trading Community Website: https://www.followme.com
Hot
No comment on record. Start new comment.