It is necessary for the Bank of Japan to pay attention to risks that could affect the domestic economy amid monetary tightening in Europe and the US, including that of the US economy falling into recession and that of global financial markets experiencing a negative shock, a summary of opinions at BoJ’s July meeting showed. “Risks to Japan’s economic outlook are skewed to the downside, particularly regarding a resurgence of COVID-19 at home and abroad, prolonged supply-side constraints, and falling asset prices reflecting monetary tightening in major economies,” a board member was quoted as saying in the summary. The BoJ at the meeting kept monetary policy ultra-loose but cut its 2022 GDP growth forecast to 2.4% from 2.9%, citing a slowdown in overseas economies and persistent supply chain issues due to the prolonged war in Ukraine. On prices, the yoy rate of change in the CPI is likely to increase by 2.3% this year, due to surging prices of energy, food, and durable goods.
