BOJ’s Adachi: Coronavirus outbreak has dealt a severe blow to Japan, USD/JPY stays below 110


Bank of Japan’s (BOJ) new board member said on Thursday, the Coronavirus outbreak has dealt a severe blow to Japan and global economies.

Additional quotes

With timing of containing virus uncertain, BOJ must first help ease immediate pain on firms before considering steps to boost economic growth.

BOJ will need to take further steps if it must provide more funds than under framework set in march.

No need to take additional steps now but watching developments carefully.

I had been proponent of policy focusing on amount of money but don't think YCC, negative rate policy are necessarily a wrong policy.

If economy faces crisis from virus fallout, BOJ should boost liquidity provision rather than cut rates.

BOJ still has scope to buy ETFs under new ceiling set in March.

BOJ has room to deepen negative rates but such a step only becomes an option after economy emerges from hit from coronavirus.

Japan may lose momentum to hit price goal short-term due to coronavirus outbreak but demand may rebound once virus contained.

Can't say at this stage how much more BOJ can deepen negative rates, ramp up stimulus.

Japan no longer in a situation where BOJ can keep easing without looking at demerits of its policy.

Reviewing BOJ’s 2% inflation target too hastily could heighten unnecessary risk of yen rises.

USD/JPY reaction

Having hit a new daily low at 109.83 in the last minutes, the USD/JPY pair keeps its range below 110.00, as the extension of the losses in the US dollar index and S&P 500 futures amid risks aversion weighs.

More so, the safe-haven yen remains underpinned by the virus crisis led Japanese and global economic growth concerns.

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