Sunday, October 17, 2021

BOJ Kuroda vows to ease policy on weak consumption, inflation

TOKYO – Bank of Japan Governor Haruhiko Kuroda on Thursday largely stressed the bank’s readiness to maintain stimulus, as the fallout from the pandemic dents consumption and keeps inflation off its 2 percent target. .

Kuroda said the world’s third-largest economy is expected to show clear signs of recovery as strong corporate profits and capital expenditure offset some weakness in consumption.

But he warned the outlook for consumption, which holds the key to continued economic recovery, was highly uncertain and dependent on growth in relation to the pandemic.

In a speech delivered at an online annual meeting of Japan’s securities industry, Kuroda said, “If further advances in vaccination allow society to prevent infections while economic activity resumes, consumption is expected to increase.” “

“But the timing and pace of recovery in consumption remains highly uncertain and depends on how the pandemic unfolds.”

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Kuroda maintained his optimism on exports and production, saying they have continued to grow despite the impact of supply constraints.

Kuroda said that with services sector firms still facing funding strain, the BOJ will focus primarily on cushioning the blow from the pandemic through loan programs put in place last year.

“We will examine the impact of the pandemic on the economy and, if needed, take additional easy steps without hesitation,” he said.

Strong exports, driven by solid global demand, have helped offset weak consumption and pulled Japan’s economy out of a severe recession caused by the pandemic last year.

But chip shortages and supply disruptions caused by Asian factory closures have hit Japanese manufacturers’ output, threatening to derail the country’s fragile recovery.

Leika Kihara. By

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This News Originally From – The Epoch Times

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