- BoJ minutes
While the USD/JPY pair gave up its monthly high on Friday, the minutes of the latest Bank of Japan meeting confirmed that a set of measures to boost growth and deflation is working. All the BoJ members believe there is an ongoing moderate recovery, which is expected to continue. Board members also pointed out the world's third largest economy appears to finally be on the right track in its battle with decade-long deflation, as latest figures point at a pickup in consumer prices. One of the members also claimed that Yen's depreciation is boosting inflation more than initially was thought, saying both the CPI and economic growth are moving completely in line with the BoJ's scenario.
The previously-mentioned facts were widely expected by markets, but what is more important is the remark about the potential impact of the recently-made consumption tax hike. Currently, board members do not wish to undertake any action to prevent a slowdown provided by a tax increase. Amid main risks to economic stability, central bankers mentioned only developments in the emerging and commodity-exporting countries, fragile European economy and the pace of recovery of the United States. Simultaneously, the central bank revised upwardly its exports outlook and the assessment of the industrial production and investment. It means that domestic demand will continue accelerating, while the economy can be hit by global risks.
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