BOJ’s Sakurai: Question of why inflation no longer accelerating is something that needs to be looked into

Bank of Japan’s (BOJ) policymaker Makoto Sakurai continues to throw more light on the monetary policy and inflation outlooks in his scheduled speech this Wednesday.

Key quotes

“Monetary policy, albeit indirectly, can help the economy make structural changes.”

“Japan will see an increase in bankruptcies, job losses and fall in potential growth if it takes longer than expected to contain the pandemic.”

“If banks become saddled with more bad loans, their financial health may be hurt and lead to a decline in the financial system's functioning.”

“If financial system risks heighten, that could weigh on the real economy.”

“Japan financial institutions have sufficient buffers now but BOJ must be prepared to take necessary, swift action with an eye on the economy, financial system.”

“Near-term challenge for monetary policy is to support efforts toward striking a balance between the need to contain the pandemic, prop up the economy.”

“Medium-, long-term challenge in guiding monetary policy is to ensure Japan’s financial system remains stable.”

“BOJ must underpin inflation expectations, ensure they are in positive territory, as the private sector may hold off on spending if the project price falls ahead.”

“BOJ’s pledge to maintain an accommodative monetary policy, increase monetary base until inflation stably hits its target playing a crucial role in supporting the economy.”

“Japan prices coming under strong downward pressure, inflation may not accelerate much even after price growth turns positive.”

“Sluggish price growth is something not unique to Japan, issue has become a common problem for major advanced economies. “

“Question of why inflation no longer accelerating is something that needs to be looked into anew sincerely.”

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