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The BoJ April meeting and Summary of Opinions states that there continues to be risk Japan may slide into recession depending on sales tax hike impact, overseas developments.

Key points:

  • Uncertainty on price outlook will persist through fiscal 2021;
  • Must scrutinise whether Japan is in a protracted situation where soft inflation weighing on inflation expectations, vice versa;
  • Must maintain current easy policy with eye on side-effects, also need monetary and fiscal policy mix toward fiscal 2021;
  • Must always think about ways to boost sustainability of policy framework;
  • Appropriate to review forward guidance on interest rates due to heightening overseas uncertainties;
  • Such as by mentioning time frame on how long BoJ will keep rates very low;
  • Must ease policy further decisively, flexibly if momentum for achieving price target lost;
  • Must carefully balance benefits, costs of monetary easing;
  • Further declines in interest rates could aggravate demerits of monetary easing more than boosting economy.