At the monetary policy meeting that will be held from 27th of this month, the Bank of Japan will discuss raising the outlook for prices this year and 2022 in response to the soaring prices of raw materials.
We will also discuss the impact of the rapid depreciation of the yen on the economy and prices.
The Bank of Japan will hold a monetary policy meeting for two days from the 27th of this month to discuss the current state of the economy and the outlook for the economy and prices.
Regarding prices, the outlook for the rate of price increase this year and 2022 is based on the fact that the prices of energy such as crude oil and raw materials such as grains such as wheat are soaring in the wake of Russia's invasion of Ukraine. We are going to discuss how to raise it from the previous plus 1.1%.
The monthly inflation rate may soon reach the BOJ's target of + 2%, but the BOJ's current inflation is accompanied by increases in wages and demand, mainly due to soaring raw material prices. Therefore, it is analyzed that it will be a downward factor for the economy through a decrease in real income of households and a deterioration in corporate profits.
In light of this situation, Governor Kuroda has repeatedly emphasized his policy of persistently continuing the current strong monetary easing in order to support the economic recovery.
However, the yen depreciated rapidly against the backdrop of widening interest rate differentials between Japan and the United States due to differences in policy directions between the Bank of Japan, which continues to ease monetary policy, and central banks in Europe and the United States, which are strengthening monetary tightening. As it progresses, it is expected to discuss the impact of the weak yen on the economy and prices.