In the summary of opinions of September 18-19 BoJ meeting, it’s noted that the “he underlying trend in Japan’s economic activity has not changed significantly”. But there were growing downside risks “stemming from trade friction between such economies as the United States and China as well as from fluctuations in financial markets.”
On inflation, the summary noted “it is gradually becoming clear that the delay in a rise in inflation is affected by not only a mere demand shortage, but also various factors such as the persistent deflationary mindset and improvement in productivity stemming from expansion in supply capacity.”
On monetary policy, the summary noted both then need to “persistently maintain highly accommodative financial conditions” and “carefully examining the positive effects and side effects” of easing. Also, there is “room” to make policy “more flexible” for “market functioning”.
A batch of economic data is also released from Japan. Tokyo CPI core accelerated to 1.0% yoy in September versus expectation of 0.9% yoy Unemployment rate dropped to 2.4% in August versus expectation of 2.5%. Retail sales rose more than expected by 2.7% yoy. However, industrial production missed and rose only 0.7% mom.
