BoJ Governor Haruhiko Kuroda said today that “for the time being, risks to Japan’s economic outlook are skewed to the downside,” even though, it’s likely to “recover on rising external demand” on the back of fiscal and monetary support.
He expected the economy to resume a “sustainable growth path as rising income supports spending”. Capex would more rise more clearly ahead as corporate profits improve.
On inflation, Kuroda said the impact of mobile fees on CPI is likely temporary. He doesn’t expect Japan to return to deflation.
“Economic activity will remain below post-pandemic levels for the time being,” he added. “The near-term focus would be to respond to the pandemic’s impact.” “Taken into account the impact of the pandemic, we will consider extending further” the measures to ease funding strains.
