Having initially warned about the risk of an increase in corporate bankruptcies and business closures, the Bank of Japan (BOJ) monetary policy board member Seiji Adachi marked another fear due to the coronavirus (COVID-19) resurgence.
The policymaker expects the covid wave 2.0 could ease the households spending while also conveying the hidden risk of deflationary pressure if more temporary workers lose their jobs.
It’s worth mentioning that the BOJ board member indicates a 2.0% inflation target as a global standard while saying, “Abandoning 2% inflation target will heighten uncertainty over monetary policy.”
Additional comments
BOJ’s new scheme targeting regional financial institutions is aimed at incentivizing efforts to boost their financial standing.
BOJ’s new scheme targeting regional lenders not directly linked to monetary policy.
Market implications
USD/JPY bounces off an intraday low of 105.18 following the news. Though, S&P 500 Futures and Japan’s Nikkei 225 carried their previous sluggish moves on the update.
Also read: BOJ’s Adachi warns about risk of increase in corporate bankruptcies, business closures
Share
