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Bank of Japan lowers annual growth estimate on COVID pressures

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The Bank of Japan maintained its ultra-loose monetary policy …

U.S.: We need to slow down the infusion of dollars into the banking system. Year-on-year prices have risen by more than 5%! 

Japan: Oh, ‘print’ that yen, baby, print! More, more, more!

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A couple additional layers to this. According to Trading Economics:

The yield on the benchmark Japan 10-year JGB extended its downward momentum to below 0.09%, the lowest in roughly two weeks, following the Bank of Japan monetary policy meeting. The central bank of the world’s third largest economy maintained its dovish stance, with the 10-year bond yield target left unchanged at 0% and Governor Haruhiko Kuroda added that the yen’s depreciation was welcomed and would not hurt the economy through the rise in import prices.

And:

The Bank of Japan left its key short-term interest rate unchanged at -0.1% and kept the target for the 10-year government bond yield at around 0% during its October meeting by an 8-1 vote, as widely expected. In a quarterly outlook report, the central bank slashed its projected rates of the GDP for the current FY to 3.4% from earlier forecasts of 3.8% made in July, citing sluggish consumption and a slowdown in exports and output as supply disruptions persisted. The board also revised downward consumer inflation forecast for the current FY to a flat reading from earlier predictions of 0.6%, due to the impact of cellphone fee cuts and the effects of rebasing the price index. For 2022 FY, the BoJ maintained its view the economy was headed for a moderate recovery, revising up its growth forecast to 2.9% from 2.7% as vaccinations accelerate. Meantime, consumer inflation projections for the year are unchanged at 0.9%.

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One more related item from today. This time from Reuters (Global Supply Constraints Deal Heavy Blow To Japanese Firms):

A global parts and chip shortage is taking a heavy toll on Japanese firms with seven out of eight automakers seeing global output drop in September, casting doubt over the central bank’s view the impact of supply constraints will be temporary.

With many Asian countries seeing infection numbers fall, some analysts expect supply constraints to ease in coming months . . . But the output disruptions may deal a severe blow to Japan’s economy, which has relied on exports to offset the weakness in consumption as the fallout from the COVID-19 pandemic lingers.

The Bank of Japan cut this year’s economic growth forecast in a quarterly report on Thursday, citing weak consumption and supply constraints. But it raised its growth forecast for next fiscal year and described the slowdown in exports and output as “temporary.”

Still, the central bank warned of the risk the economy could “worsen further” if supply bottlenecks last longer than expected or if the damage they cause grows.

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This article is poorly written and i suggest to read elsewhere for news on economy/business....

let me sum it up:

1) BOJ cut inflation outlook for 2021 and kept inflation outlook unchanged for next 2 years

2) BOJ cut growth outlook for 2021 but RAISED outlook for 2022

also Kuroda said slower inflation (vs other countries) were due to 3 factors:

1) delayed demand recovery

2) more jobs secured during pandemic so less wage pressure from re-hiring

3) firms reluctant to pass costs onto consumers

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The BoJ is tied with the FED. Basically, it is the subordinate of the FED.

Japan goes down when the US goes down. The Yen goes down when the USD goes bursts.

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We need to slow down the infusion of dollars into the banking system

You do realize that the banking system loses an equivalent amount of their assets (bonds) in the process? It's a swap, where both sides receive "infusions," and no one's bottom line is altered. This is why loose monetary policy doesn't cause dangerous levels of inflation.

 Oh, ‘print’ that yen, baby, print! More, more, more!

No money is "printed" in this swap. No other topic is so poorly understood yet engenders such strong opinions as monetary policy.

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