BOJ debated bright signs in economy in March even as it reviewed policy tools



© Reuters. FILE PHOTO: FILE PHOTO: A security guard walks past in front of the Bank of Japan headquarters in Tokyo

By Leika Kihara

TOKYO (Reuters) – Some Bank of Japan (BOJ) policymakers saw early bright spots in the pandemic-hit economy even as they debated steps to make the bank’s ultra-loose monetary policy more sustainable, a summary of opinions voiced at the March rate review showed on Monday.

At the March meeting, the BOJ decided on a range of steps to make its policy tools sustainable enough to weather a prolonged battle to cushion the economic blow from COVID-19, and fire up inflation to its perennially elusive 2% target.

“Japan’s economy may be shifting away from a downward trend since the outbreak of COVID-19, with exports and output remaining firm,” one of the nine board members was quoted anonymously as saying in the summary.

The BOJ releases a summary of opinions voiced at each policy-setting meeting several days after the meeting, but does not disclose who expressed the opinions.

“Although uncertainties remain over COVID-19 … downside risks to economic activity at home and abroad have been contained with no signs of increase in industries suffering from deteriorating business conditions,” another board member said.

On prices, some board members warned that risks of deflation or prolonged price stagnation remained the BOJ’s primary concern, even as some Western economies were experiencing an uptick in inflation, the summary showed.

The remarks reinforce a dominant market view that the BOJ will keep monetary policy steady for the time being in hope a rebound in overseas demand will underpin Japan’s export-reliant economy.

READ  Economists are hunting for alternative indicators of recovery

One BOJ board member voiced hope that the review of its tools would allow the central bank to stick to its current policy framework “for a few years to come”.

In a sign the BOJ’s policy review had gained consent from the government, a finance ministry representative attending the March meeting said he had “no disagreement” over the decision, according to the summary.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





READ SOURCE

LEAVE A REPLY

Please enter your comment!
Please enter your name here