According to the latest June quarter survey conducted by the Bank of Japan (BOJ), the Japanese households were the most pessimistic about the economy in more than a decade in the three months to June, courtesy the coronavirus pandemic-induced hit on the country’s consumption.
Key findings
“The pandemic also weighed on inflation expectations, reinforcing expectations the health crisis will slow the bank’s push to hit its elusive 2% price target.”
“The diffusion index measuring households’ confidence on the economy stood at -71.2 in June, worsening from -36.3 in March to hit the lowest level since September 2009.”
“Of the total households surveyed, 66.7% expected prices to rise a year from now, down from 68.4% in March.”
Market reaction
The yen was unfazed by the above survey, as USD/JPY tracked the broad-based US dollar bounce amid risk-off mood. Growing coronavirus lockdown risks continue to dent the sentiment.
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