Daiwa Securities: Bank of Japan Expected to Take Neutral View on Economic Risks

Daiwa Securities economist Kento Minami said the Bank of Japan is expected to take a neutral view on the outlook for economic risks in its quarterly forecasts to be released in July. According to Jin10, Minami said an optimistic summary of opinions from the Bank of Japan’s meeting last week suggested the central bank will shift to a neutral stance on the economic outlook. In its April report, the Bank of Japan said economic risks were tilted to the downside. Minami said downside risks to the economy have faded, while upside risks to prices have clearly become the focus, and he expected this situation to directly influence policy decisions at the July meeting and beyond. He added that if the economy stabilizes and inflation risks remain elevated, the Bank of Japan may have more room to raise interest rates earlier and faster than expected in order to control prices.