Bank of Japan Monetary Policy Minutes : おはようございます。

The Bank of Japan announced Tuesday night that it was keeping its monetary policy steady, and reported its price and economic forecasts unchanged.

The 2018 outlook for the Japanese economy is the grow at a moderate pace with both corporate and household demand strong. All being supported by the highly accommodated financial conditions present in the Japanese economy and albeit the worldwide economy.

Taking advantage of the accommodative economic conditions, Business fixed investment is forecasted to grow steadily, with the added increase in Olympic-related investments.

Moreover, Labor-saving investments that will be employed to address labor-shortages will be an added tailwind to investment spending in 2018.

Private consumption is expected to increase moderately with the aforementioned labor-shortages being addressed and thereby putting more money in consumers pockets to spend.

Public investment is seen to remain at a relatively high levels given the Olympic Games-related investments. However, it’s important to note that the effects of the BoJ’s last stimulus measures will have a diminishing impact to the economy.

With advanced economies propelling further growth in emerging economies , exports are seen to sustain an increasing trend. However, keep this chart in mind.

With that in mind, looking ahead to 2019, the BoJ is expecting their economy to continue to expand driven by “external” demand,nonetheless a projected declaration in the domestic demand could put brakes on the Bull Market is Asia.

The BoJ suspects Business-Fixed Investment to contract after the Olympic-Games related spending “peaks out”. Moreover, they cite the slowdown in domestic demand can be attributed to cyclical capital stock adjustments after a sustained economic expansion to be warranted.

The central bank forecast the economy to grow 1.4 percent in the fiscal year starting in April, with inflation of 1.4 percent over the same period.

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