MNI BRIEF: High Costs A BOJ Worry On Terms Of Trade

Bank of Japan officials expect a worsening of the terms of trade to widen a difference between exporters and smaller non-manufacturers, although the spread of vaccinations will narrow a difference between manufacturers and the face-to-face services, MNI understands.

The negative impact of high costs caused by surging raw materials on exporters' profits will be somewhat offset by an increase of exports on strong demand, according to the BOJ's views. The BOJ has upgraded its assessment of exports and industrial production, by adding "steadily" in describing their increases.

However, bank officials are focused on whether a virtuous cycle from profits to spending in the corporate sector continues working amid high raw material costs.

Bank officials expect consumer spending, mainly traveling and eating-out, by the elderly and high-income groups to gradually recover,.