Today have been published the minutes of the previous meeting of the Bank of Japan. Among the main points should be allocated that consumption decreased more after the previous increase of the sales tax in 1997; should be paid more attention to other indicators of inflation other than the consumer price index; the negative effect of increasing the sales tax by 3% from 5% to 8%, will gradually decline. Also, the Bank of Japan has identified the need to monitor the geopolitical risks, as well as the situation in the construction market of China.
In recent time, the yen’s price movements depends on the geopolitical situation in the world and in case of reduction of tension, devaluation of the national currency of Japan will continue due to the loose monetary policy of the Bank of Japan, which in the autumn can launch the next measures to support the economy and tightening of monetary policy in the United States.
We maintain our medium-term negative outlook for the yen.