In Tokyo, Japan, on May 22, 2020, a man wearing a protective mask walks by the Bank of Japan headquarters during the coronavirus illness (COVID-19) outbreak. REUTERS/File Photo/Kim Kyung-Hoon Reuters, TOKYO, June 28 – According to a summary of their discussion at a June 17-18 meeting posted on Monday, Bank of Japan policymakers hoped that speeding up coronavirus vaccinations would help the economy, but they assessed any inflationary pressures as muted given the shaky recovery. A fourth wave of infections has only recently passed through Japan. On June 20, authorities in Tokyo and eight other prefectures decided to lift the state of emergency due to a decrease in the number of new cases and an increase in vaccinations. “Vaccination success is starting off a strong economic cycle in Japan,” one of the nine board members was reported as saying. At its June meeting, the BOJ kept monetary policy unchanged and announced a plan to increase funds for climate change mitigation that will be implemented by the end of the year. find out more “While ambiguous and spotty, advancements in immunizations have helped to clarify the global economic recovery. Something similar is hoped to happen in Japan “Another viewpoint emerged. The bullish assessments reflect the BOJ’s belief that the economy would emerge from its funk on the back of strong exports and rising domestic demand, without the need for extra monetary stimulus. According to the summary, some officials detected evidence of a resurgence in inflation, with one expressing hope that pent-up demand will help accelerate inflation in the second half of this year. However, while lackluster demand and lower mobile fees offset increased input costs, no one expected significant inflationary pressure building up. “Rising commodity prices and improved domestic demand may push up inflation,” one member speculated, “albeit such upward price pressure will lack momentum.” Leika Kihara contributed reporting, and Kim Coghill edited the piece. The Thomson Reuters Trust Principles are our standards. Continue reading
