The Bank of Japan (BOJ) is out with its quarterly outlook report, with the key highlights found below.
Risks are skewed towards downside for economy, prices.
Japan’s economy sustaining momentum for hitting 2% inflation, but momentum lacking strength.
Japan’s economy expanding moderately as a trend, though overseas slowdown affecting exports, output, business sentiment.
Inflation expectations moving sideways.
Overseas slowdown likely to affect japan economy but impact on domestic demand will be limited.
No sign so far of excessively bullish expectations in asset markets, financial institutions’ activities.
Prolonged downward pressure on financial institutions’ profits from low rates could destabilise financial system.
Risk of financial system destabilising not big for now as financial institutions have sufficient capital bases.
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