Market Updates: BOJ Gov Kuroda Speech, Key Takeaways

Key Takeaways from BOJ Gov Kuroda’s Speech

• The Bank of Japan board members acknowledged that continued downward pressure on financial institutions’ profits could cause the risk of a progressive pullback in financial intermediation and destabilize the financial system.
• The BOJ requires to give attention to progress in their situation.
• The BOJ doesn’t see any imminent need of adjusting the easy policy to alleviate the side-effects of that policy.
• The BOJ pledged to continue its current easy policy “for an extended period of time,” taking into account uncertainties regarding economic activity and prices.

Forecasts

• The inflation rate in fiscal 2019 reduced to 1.4% from the 1.5% seen in July and the median inflation rate in fiscal 2020 was also lowered to 1.5% from 1.6% previously.
• The central bank lowered the medium-term inflation outlook for the prevailing fiscal year to 0.9% from 1.1% outlined in July.