The Bank of Japan is seen downgrading this fiscal year's economic and inflation outlooks in its quarterly assessment report due to be released at next week's monetary policy review meeting, Reuters reports, citing sources familiar with the central bank’s thinking.
Key takeaways
"It's somewhat weaker than three months ago," one of the sources said of this fiscal year's growth projections.
“The main reason for the downward revision in growth is the bigger-than-expected economic slump in April-June and soft consumption during the summer.”
“The nine-member board is also seen slightly trimming its inflation forecast for the current fiscal year, due largely to the impact of a government campaign offering discounts to domestic travel.”
Meanwhile, the latest Bloomberg survey of analysts showed Monday, the BOJ is unlikely to make any changes to its monetary policy settings but it could extend the duration of its measures to counter the coronavirus pandemic by January.
USD/JPY well bid in Asia
USD/JPY holds the higher ground above 105.50 amid broad US dollar strength, as sentiment remains cautiously optimistic ahead of the US fiscal stimulus deadline.
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