In the Summary of Opinions at BoJ’s January 20-21 meeting, it’s noted, “the impact of the reinstatement of the state of emergency for 11 prefectures… should be monitored carefully given that private consumption in these prefectures accounts for nearly 60 percent of Japan’s.” While downward pressure is “likely to be strong for the time being”, the economy is expected to “maintain its moderate improving trend”.

BoJ also noted, “this year, it is necessary to closely monitor the broad impact of political developments overseas, such as the change of government in the United States and the replacement of the Chancellor of Germany, on economic activities and financial conditions at home and abroad.”

On monetary policy, one member said, “in terms of yield curve control and purchases of assets such as exchange-traded funds (ETFs), it is crucial for the Bank to conduct them more flexibly in a prioritized manner while maintaining the current policy framework.”

Full Summary of Opinions here.

BoJ Governor Haruhiko Kuroda said the central bank’s ETF buying is not distorting the Tokyo stock market. “We are buying ETFs as part of a comprehensive monetary easing framework. We have no plans now to end the framework or our ETF purchases,” he said.

“The frequency of our ETF buying has fallen sharply recently, as well as the size of each purchase,” Kuroda said. “We’re buying flexibly looking at market developments.”