MNI BRIEF: BOJ Keeps Economic Recovery, Inflation View

The Bank of Japan board on Friday held its overall economic assessment steady, noting Japan’s economy "had recovered moderately.”

The BOJ also maintained the near-term economic recovery scenario despite downward pressure stemming from a slowdown in the pace of the recovery in overseas economies.

Despite persistent, stronger consumer price moves, the BOJ repeated that the y/y rate of increase in the CPI (all items less fresh food) will likely decelerate, as the effects of the pass-through to consumer prices of cost increases led by the past rise in import prices wanes. The BOJ also repeated that inflation expectations have shown some upward movement again.

The BOJ also held its assessment on major economic components, such as exports, production and private consumption. “There are extremely high uncertainties for Japan's economy and prices, including developments in overseas economic activity and prices, developments in commodity prices, and domestic firms’ wage- and price-setting behavior," the bank repeated.

“Under these circumstances, it is necessary to pay due attention to developments in financial and foreign exchange markets and their impact on Japan’s economic activity and prices."