The Bank of Japan minutes revealed that a few members said prolonged damage to economy from pandemic could lead to solvency problems for some firms, affect financial system stability.
Members agreed must ease without hesitation if needed, with eye on impact of pandemic on economy.
One member said must examine whether current policy framework was sufficient, act promptly if action was needed.
One member said close, appropriate coordination between fiscal, monetary policies crucial.
Members agreed there was risk financial intermediation could stagnate if financial institutions' profits remain under prolonged strain.
Members agreed there was chance financial system vulnerability might heighten.
One member said BoJ must look more deeply into how monetary policy could be shaped in 'with-corona' world.
One member said must scrutinise how monetary policy affects business management from medium-term perspective.
Govt representative said hope boj keeps in close contact with govt in achieving early economic recovery via appropriate monetary policy.
A few members said must retain cautious view on pace of overseas economic recovery.
A few members said must be on alert to risk Japan, other countries, might see a renewed resurgence in coronavirus infections.
One member said a resurgence in infections would delay timing of economic recovery.
One member said impact of pandemic, if prolonged, could lead to job losses, hurt household income and spending.
A few members said prolonged damage to economy from pandemic could lead to solvency problems for some firms, affect financial system stability.
The Bank of Japan publishes a study of economic movements in Japan after the actual meeting.
These meetings are held to review economic developments inside and outside of Japan and indicate a sign of new fiscal policy.
Any changes in this report tend to affect the JPY volatility. Generally speaking, if the BoJ minutes show a hawkish outlook, that is seen as positive (or bullish) for the JPY, while a dovish outlook is seen as negative (or bearish).
Market implications
There is a growing sentiment of insolvency problems in the market.
The bank indexes are bleeding to extraordinarily low levels, such as the KRB.
More here: USD/JPY testing bear's commitments at a critical resistance
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.