In the summary of opinions at June 19-20 BoJ meeting, it’s noted that Japan’s economy is “likely to continue on a moderate expanding trend”. And “year-on-year rate of change in the consumer price index (CPI) is likely to increase gradually toward 2 percent”. Although “downside risks warrant attention”, it’s “appropriate” to continue with “current monetary policy stance”.
However, there was “an increase in uncertainties regarding overseas economies. US-China trade conflicts and threat of no-deal Break has “started to affect Japan’s economy and people’s sentiment”. The schedule consumption tax hike could “exert downward pressure on economic activity and prices.”
It’s argued that it’s important for BoJ to take “some kind of policy responses if some changes emerge in the baseline scenario of the outlook for prices”. And, “all policy measures — including adjustments in short- and long-term interest rates, an acceleration in the pace of expansion in the monetary base, and an increase in the amount of assets to be purchased — should be deliberated when considering additional easing.”
Additionally, it’s also argued that considering growing expectation for easing by Fed and ECB, BoJ “also needs to strengthen monetary easing”. And, “it is necessary to further consider in depth the feasibility of a wide range of additional easing measures, as well as their effects and side effects.”
