Bank of Japan (BOJ) monetary policy board member Junko Nakagawa said on Wednesday that “the BOJ will decide the fate of the remaining pandemic-relief programme at its September meeting, with an eye on the impact of the pandemic on financial conditions.”
BOJ’s policy response has had the desired results.
Japan's consumer inflation has surpassed 2%, but simply reaching 2% will not suffice.
What BOJ is aiming at is positive cycle in which wages, inflation rise sustainably driven by increase in corporate profits, improvements in labour market.
BOJ must continue monetary easing to achieve inflation target in sustained, stable manner backed by positive economic cycle.
Japan's economy, mainly consumption, continuing to pick up as pandemic impact subsides.
Japan's output, exports showing weaknesses due to parts shortages, global supply constraints.
Sales prices in Japan not rising as quickly as raw material costs.
Japan will continue to see energy, food and industrial goods prices rise for time being.
Japan's inflation likely to accelerate moderately as a trend.
There is uncertainty on whether consumption can sustain moderate increase even as prices rise.
Must watch carefully impact of inflation on household spending.
USD/JPY is off the lows, trading 0.14% lower on the day at 138.60, as of writing. Upbeat Japanese Industrial Production and Retail Sales data helped put a bid under the yen, sending the pair lower.