BOJ Outlook Report: Risks are skewed towards downside for economy, prices
The Bank of Japan (BOJ) is out with its quarterly outlook report, with the key highlights found below.
Risks are skewed towards downside for economy, prices.
Japan's economy sustaining momentum for hitting 2% inflation, but momentum lacking strength.
Japan's economy expanding moderately as a trend, though overseas slowdown affecting exports, output, business sentiment.
Inflation expectations moving sideways.
Overseas slowdown likely to affect japan economy but impact on domestic demand will be limited.
No sign so far of excessively bullish expectations in asset markets, financial institutions' activities.
Prolonged downward pressure on financial institutions' profits from low rates could destabilise financial system.
Risk of financial system destabilising not big for now as financial institutions have sufficient capital bases.
BOJ forecast FY21 core CPI +1.5% vs. July +1.6%.
BOJ forecast FY20 core CPI +1.1% vs. July +1.3%.
BOJ forecast FY19 core CPI +0.7% vs. July +1.0%.
On the above headlines, the USD/JPY pair sticks to losses near 108.60, four-day lows.
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
