The following are the important takeaways from the BOJ’s quarterly outlook report, which was released on Friday along with the monetary policy announcement.
Although activity remains low compared to pre-pandemic levels, Japan’s economy is expected to rebound.
Consumer inflation in Japan is expected to remain at 0% for the time being.
After that, consumer inflation in Japan is projected to pick up.
Japan’s economy is still in a bad situation, but it is improving.
The economic prognosis for Japan is quite unpredictable, owing to pandemic events.
Exports and output have been constantly increasing.
For the time being, the risks to Japan’s economic outlook are weighted to the downside, but they are more evenly distributed in the long run.
COVID-19’s ramifications are fraught with uncertainty.
Inflation expectations in Japan are trending sideways in the medium and long term.
COVID-19, including variations, may put downward pressure on the economy.
If long-term growth expectations fall as a result of the COVID-19 shock, enterprises’ and families’ spending appetites may be difficult to boost.
If the impact of COVID-19 is more than projected, there is a risk that the real economy may deteriorate, putting financial system stability at risk.
Price reductions by businesses to promote demand are unlikely to be widely noticed.
Future changes in exchange rates, international commodity prices, and import prices are all worth monitoring./n
