BoJ Minutes: China's lockdown measures could exert significant downward pressure on Japan exports


The Bank of Japan's March meeting minutes are coming out in stages as follows:

Key notes

One member said markets may turn risk aversive if rising inflation triggers withdrawal of monetary easing by central banks.

Members agreed japan's economy likely to recover on rising external demand, accomodative monetary policy

A few members said spring wage negotiations showed some bright signs such as big firms' wage hikes.

Several members said chance of recent import price rises leading to sustained increase in consumer inflation is low.

China's lockdown measures could exert significant downward pressure on japan exports if they disrupt firms' local production.

Some members said BoJ must support economy's recovery from pandemic fallout as japan not in situation where inflation will sustainably exceed its 2% target.

One member said no need to ramp up stimulus as economy likely to continue recovering

One member said must consider monetary policy response with eye on various scenarios based on expected change in economic, price environment.

Several members said BoJ must conduct market operations to curb rise in long-term interest rates.

USD/JPY update

Meanwhile, the US dollar is firm at the start of the week and it is pushing the yen lower toward the cycle highs. 

About the BoJ minutes

The Bank of Japan publishes a study of economic movements in Japan after the actual meeting. These meetings are held to review economic developments inside and outside of Japan and indicate a sign of new fiscal policy. Any changes in this report tend to affect the JPY volatility. Generally speaking, if the BoJ minutes show a hawkish outlook, that is seen as positive (or bullish) for the JPY, while a dovish outlook is seen as negative (or bearish).

 

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