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Must strengthen monetary easing to prevent worsening of corporate, household confidence

The Bank of Japan’s March meeting Summary of Opinions states that they must strengthen monetary easing to prevent worsening of corporate, household confidence.

Key notes

  • When events are being cancelled and people are told to stay home, what’s necessary is not to stimulate demand but to alleviate corporate funding fears, stabilise markets.
  • Priority for time being is to provide ample liquidity, support corporate funding via temporary measures.
  • BoJ must deliver massive, quick measures to support households, firms as impact of coronavirus deepening. 
  • Hope govt takes appropriate, large-scale steps as many people losing opportunities to work, suffering from falling income.
  • BoJ can respond flexibly, including holding emergency meeting again, and pace up JGB buying up to its 80-trln-yen per year guideline.
  • In times like now, where there are recession fears, BoJ must work with govt to support growth via policy coordination.
  • BoJ must closely share information, maintain strong coordination with govt, other major central bank.
  • Govt representative said welcomes BoJ’s move as helping smooth corporate funding, stabilise markets.
  • Govt representative said hopes BoJ and govt can continue to send strong message to public of their resolve to cooperate closely on policy.
  • There is a risk impact of coronavirus outbreak on japan’s economy could be prolonged and big, given infection spreading globally.
    BoJ March meeting summary of opinions: japan’s economy may continue to stagnate even after overseas economies recover given impact of coronavirus could be enormous.
  •  Doubtful japan’s economy can stage a strong rebound once virus contained as domestic demand had already slumped due to tax hike, natural disasters.


More to come…

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