BOJ sees weaker near-term economy; recovery view intact – MNI

Bank of Japan (BOJ) officials predict a weaker Japanese economic outlook for April due to subdued domestic consumption caused by the extended state of emergency and supply-side restrictions caused by semiconductor shortages, MNI reports, citing people familiar with the BOJ thinking.

Additional points

“The BOJ will likely downgrade its assessment on private consumption made in April at its two-day policy meeting ending on June 18 as face-to-face services are further hit by the state of emergency.”

“Bank officials expect private consumption, which will fall in the second quarter, to gradually pick up in or after the third quarter due to the spread of vaccinations.”

“As for private consumption, the BOJ sees a gradual recovery as older people in Japan are more cautious about going out than those in the US and Europe. “

“But the BOJ is not ruling out upside risk, given that private consumption had picked up swiftly before herd immunity was broadly established overseas. Exports of automobiles are expected to fall in May and June as automobile makers which are strongly hit by the shortage of semiconductors reduce their production, according to the BOJ view.”

Market reaction

USD/JPY was last seen trading at 109.55, up 0.06% on the day.

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