BOJ’s Amamiya: Ready to take additional easing without hesitation with eye on pandemic impact

In a scheduled speech on Wednesday, Bank of Japan (BOJ) Deputy Governor Masayoshi Amamiya said that the central bank is prepared to ease its monetary policy further without hesitation if necessary, in the face of the coronavirus pandemic.

Additional quotes

“Global economy likely to gradually recover if no big 2nd wave of infections.”

“Inflation likely to gradually accelerate in Japan but hard to foresee it nearing 2% during projected 3-year period under quarterly report.”

“In crisis times like now, policy coordination between govt, BOJ is effective.”

“BOJ’s bond buying is conducted for monetary policy purposes, not to bank-roll govt debt.”

“BOJ’s basic role is to provide liquidity, govt has schemes ready to deal with companies that face solvency problems.”

“There is high uncertainty on how pandemic affects economy, markets. “

“BOJ will strive to maintain stability in markets, corporate funding with its 'three pillar' policy means.”

BOJ has no plan to issue digital currency now but will step up efforts to consider idea.”

“Japan business sentiment worsened sharply but showing signs of bottoming out.”

“Japan consumer activity remains low but gradually heading toward recovery.”

“Japan's economy moving toward recovery phase.”

“Japan's economy likely to gradually improve in latter half of this year, though pace of recovery will be moderate.”

“Japan capex may be revised down if uncertainty over pandemic remains, but firms' spending remains firm when compared with slump in profits.”

“Govt, BOJ steps are helping curb bankruptcies, business closures, likely to have a positive effect on job market.”

“Big shocks like COVID-19 could lower household, corporate growth expectations, weigh on spending so watching developments closely.”

“If the economic downturn persists, it could affect the financial system.”

“Don't see a wide range of firms cutting prices to prop up demand, as had been the case in Japan’s past deflation period.”

“There is uncertainty on how a pandemic could affect inflation, as supply constraints may push up some prices.”

“Unlike during the Lehman crisis, Japan’s financial system maintaining stability as a whole.”

Market reaction

The above remarks have little to no impact on USD/JPY, as it keeps its range trade intact around 105.00 ahead of the Fed decision.