BOJ must maintain pandemic-relief lending programmes as long as there is a risk of another wave of covid infections.
When withdrawing pandemic-relief support, must ensure the move does not hamper the BOJ effort to hit the 2% price goal.
BOJ may have little choice but to extend pandemic-relief support unless it becomes clear Japan’s economy can return to a pre-pandemic state.
Rising raw material prices worsening Japan’s terms of trade but corporate profits remain strong.
If rise in raw material prices is prolonged and companies cannot pass on costs to customers, that could hurt corporate profits.
If pent-up demand props up Japan’s economy, domestic prices, wages may start to rise and offset worsening terms of trade from rising raw material costs.
Don’t see immediate need to top up stimulus.
developing story …