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A sharp decline in the yen would hurt the economy and increase uncertainty

The Bank of Japan’s June meeting summary of opinions has been released and below are some of the key points.

  • The BoJ needs to remain dovish, keeping a close eye on the market, the impact of FX on the economy and prices.
  • The number of goods that are priced higher is increasing due to rising commodity costs and the weak yen, but is appropriate to maintain loose monetary policy as inflation is not being driven by a positive business cycle.
  • Maintaining an ultra-loose policy is effective in achieving sustainable wage growth.
  • Needs to increase household purchasing power and inflation expectations to steadily meet Boj’s price target.
  • A sharp decline in the yen would hurt the economy and increase uncertainty.
  • Exports, manufacturing under more downward pressure than April due to supply constraints caused by China’s lockdowns.
  • It will likely take some time for Shanghai economic activity to normalize amid concerns over the risk of a slowdown in China and ongoing global supply shortages.

This report contains the BOJ’s forecasts for inflation and economic growth. It takes place 8 times a year, around 10 days after the publication of the monetary policy statement.

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