In the Summary of Opinions of BoJ’s January 20/21 meeting, it’s noted that there has been “no further increase in the possibility that the momentum toward achieving the price stability target will be lost.”. Therefore, it’s “appropriate” to keep monetary policy unchanged. Nevertheless, the possibility of inflation losing momentum continues to “warrant attention”. It’s “appropriate” to tilt toward monetary accommodation.
Also, Japan is just “only halfway toward moving out of the so-called Japanification” of secular stagnation where low growth, low inflation, and low interest rates last for a long period. Risk of deflation continues to “warrant attention”. Downside risks to economic activity and prices are “still significant”. It’s necessary to be prepared for possible economic downturn as one of the risk scenarios.
