BOJ Said to Mull Upgrading Assessment to Talk of RecoveryToru Fujioka and Masahiro Hidaka
The Bank of Japan will discuss upgrading its assessment of the nation’s economy by using the word “recover” for the first time in more than two years, people familiar with the central bank’s discussions said.
The bank, which says the economy has been “picking up” in its current assessment, will consider stronger language at a two-day meeting ending July 11, according to the people, who asked not to be named because the talks were private. In 2010, the next step up was “starting to recover moderately.”
Raising the assessment for a seventh straight month could aid efforts by Prime Minister Shinzo Abe and central bank Governor Haruhiko Kuroda to boost confidence in a sustained Japanese recovery. Maintaining economic momentum would help Abe in an upper-house election due this month as he tries to consolidate support for the package of monetary and fiscal stimulus and business deregulation termed Abenomics.
“It makes sense that the BOJ is upgrading the assessment as recent economic data are showing Japan’s recovery is robust,” said Masamichi Adachi, senior economist at JPMorgan Chase & Co. in Tokyo and a former central bank official. Kuroda “must be gaining confidence in the impact of monetary stimulus and the outlook for the economy.”
The Tankan survey yesterday showed big Japanese manufacturers had turned optimistic for the first time since 2011, while JPMorgan last week raised its Japanese growth forecast to 2.9 percent for the year through next March.
The Topix index capped the biggest four-day rally since April today, climbing 1.8 percent. The yen was at 99.86 per dollar at 4:02 p.m. in Tokyo, down about 20 percent in the past year, partly as a result of the BOJ’s plan for unprecedented monetary stimulus.
In June the bank said “Japan’s economy has been picking up” and raising the assessment again would mark the longest streak of upward revisions in more than a decade. The next assessment will come in the policy statement due July 11.