⚡Crypto Alert : Altcoins are up 28% in just last month! Unlock gains and start trading now - Click Here

Japan’s Economic Recovery Could be Delayed by Spike in Cases: BOJ Board Members

In the Bank of Japan’s rate review meeting held in July, some board members cautioned that a resurgence in coronavirus infections could cause the Japanese economy to take longer to recover and even destabilize the banking system by driving more businesses towards bankruptcies. BOJ policymakers were in agreement about the need for further stimulus but with profits of financial institutions declining, banks have lesser capacity to boost lending and support the economy.

The minutes offer key insight into the possible threats to economic recovery in Japan, with board members observing, “Infection numbers are increasing at a faster pace globally, so we need to be on alert of the possibility of a re-insurgence including in Japan. If infection numbers rise again, the timing of an economic recovery will be delayed.”

The BOJ had elected to hold its monetary policy unchanged, with short term interest rates -0.1% and government bond yields at around zero. Earlier this year, when the pandemic initially spread around the world, the central bank had resorted to easing its policy through higher asset purchases and rolling out lending to support corporate funding.

Although it has one of the loosest policies, some board members of the BOJ have backed the need for more easing, in order to ease funding strains. But with limited tools available, will the central bank be able to do more to boost economic recovery?

Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies
ABOUT THE AUTHOR See More
Avatar
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
Related Articles
🔒 OPEN A TRADING ACCOUNT