BOJ to Continue With Its Ultra-loose Policy For More Years to Come?

Arslan Butt•Monday, March 29, 2021•1 min read

At its most recent policy review meeting, BOJ policymakers discussed ways to make its accommodative monetary policy more sustainable even as some policymakers expressed cautious optimism about green shoots of recovery for Japan’s economy. The meeting held in March was focused on reviewing the central bank’s policy, with the bank looking to make its ultra-loose monetary policy and tools sustainable to support a long road to economic recovery following the damage caused by the coronavirus pandemic.

In the meeting, the BOJ also came to a decision about using its tools towards strengthening inflation and bringing it closer to its 2% target. The summary of the meeting which was released earlier today hints at the central bank planning to continue with its monetary policy unchanged over hopes that economic recovery around the world will spur external demand and lend a boost to its own trade-reliant economy.

One of the board members observed, “Although uncertainties remain over COVID-19 … downside risks to economic activity at home and abroad have been contained with no signs of increase in industries suffering from deteriorating business conditions.” Although, some policymakers did highlight concerns related to deflation or possible stagnation in prices as a key focus area even as its Western peers are worried about a hike in inflation over speedy recovery.

The monetary policy could be held steady for several years to come, and the decision has received approval from the government with an attending representative from the finance ministry also agreeing to the policymakers’ stance.

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ABOUT THE AUTHOR See More

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.