The Bank of Japan released its monetary policy minutes recently, which stated that the Bank's board members think that massive global stimulus measures will aid the recovery of the local economy. The BoJ expects domestic consumption to grow as Japanese citizens begin spending their accumulated savings.
“There’s a chance the stimulus measures taken by advanced nations could quicken the pace of recovery in domestic and overseas economies,” some BoJ members commented.
Exports have been recovering thanks to relatively solid global demand now that countries are making efforts to stop the spread of COVID-19. Massive vaccination campaigns are underway around the globe, which could end the necessity of lockdowns. However, the Bank of Japan's policymakers are not sure whether the pace and effects of the vaccinations could effectively quicken the recovery in both the domestic and global markets.
Just like the rest of the world, Japan's local economy has been heavily affected by the spread of the virus. In Q1 2021, the Japanese GDP fell by 3.9%, though economic performance is expected to improve in the following quarter.
Since the beginning of the pandemic, 786,298 COVID-19 cases have been reported in Japan including 14,454 deaths, making it one of the most affected countries in the world. Japan's vaccine rollout has been heavily criticized for being relatively slow compared to the rest of the world, with 32.9 million doses having been distributed among the population and 9.76 million individuals fully vaccinated, which account for 7.7% of the population.
In its latest meeting, the Bank of Japan decided to leave its monetary policy stance unchanged, highlighting that the Bank's 2% inflation target is not going to be reached anytime soon. The bank also announced a new scheme to fight climate change.
Despite the relatively slow vaccine rollout, Japan is currently planning to host the next summer Olympic Games, which are taking place at the end of July. The game's organizers recently announced that 10,000 locals will be allowed to attend the event, though it could become a closed-doors event if infections begin rising again.
So far this week, the Japanese yen has fallen by 0.61% against the US dollar, losing ground for the third consecutive week. By 7:45 GMT, the Japanese yen dropped by 0.20% against the USD to the 0.901800 level.