Japan Weekly: Bank of Japan too downbeat about inflation outlook

The Bank of Japan slashed its GDP growth forecasts this week, arguing that global trade tensions are weighing on sentiment of households and firms. While consumer confidence has indeed plunged, business confidence has held up well. What’s more, we think that the Bank has become too downbeat about the outlook for inflation. Accordingly, we still expect the Bank to tighten monetary policy at its July meeting.

Note: We’ll be discussing which economies could gain if the US turns away from China in a Drop-in on Wednesday 7th May at 0900 BST/1600 SGT. Register here for the 20-min online briefing.