What would tighter monetary policy mean for Japan?
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What would tighter monetary policy mean for Japan?

We don’t expect the Bank of Japan to tighten monetary policy meaningfully but, with inflation about to breach 2%, what if we are wrong? The direct impact of higher interest rates on the corporate sector would be manageable, but a stronger yen would weigh on corporate profits and business investment. Higher rates would also restrain housing-related activity and would probably cause a housing downturn, with the resulting fall in household wealth weighing on consumption.
Marcel Thieliant Senior Japan, Australia & New Zealand Economist
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Australia & New Zealand Economics Weekly

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9 May 2022

Japan Economics Update

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