In its quarterly outlook report, the Bank of Japan (BOJ) noted that “risks to price outlook skewed to the upside for time being, roughly balanced thereafter.”
Additional takeaways
Japan's economy likely to recover as impact of pandemic, supply constraints subsides.
Must be vigilant to financial, currency market moves and their impact on Japan’s economy, prices.
Uncertainty regarding Japan’s economy is very high.
Japan's economy picking up as impact of pandemic subsides.
Inflation expectations are rising.
Exports rising as a trend but being affected by supply constraints.
Output is under strong downward pressure.
Consumption likely to continue increasing even as household real income comes under pressure from rising prices.
Corporate profits to remain high as a whole thanks in part to weak yen.
Exports, output likely to continue rising moderately as supply constraint eases.
Board's core-core CPI median forecast for fiscal 2022 at +1.3 vs +0.9% in April.
Board's core-core CPI median forecast for fiscal 2023 at +1.4% vs +1.2% in April.
Board's core-core CPI median forecast for fiscal 2024 at +1.5% vs +1.5% in April.
Board's real GDP median forecast for fiscal 2022 at +2.4% vs +2.9% in April.
Board's real GDP median forecast for fiscal 2023 at +2.0% vs +1.9% in April.
Board's real GDP median forecast for fiscal 2024 at +1.3% vs +1.1% in April.
About BOJ Interest Rate Decision
BoJ Interest Rate Decision is announced by the Bank of Japan. Generally, if the BoJ is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive, or bullish, for the JPY. Likewise, if the BoJ has a dovish view on the Japanese economy and keeps the ongoing interest rate, or cuts the interest rate it is negative, or bearish.