Is Kuroda steering away from policy action?
- Hard to quantify impact of coronavirus on Japanese economy
- But the economy is underpinned by robust capex, fiscal spending
- BOJ will carefully watch economy, market developments and take appropriate action
- Risk impact of virus outbreak could be quite big given China's presence
- That will worsen consumer sentiment and affect output
- Virus outbreak is hurting inbound tourism, exports
That fiscal line seems like a bit of a giveaway that the central bank isn't quite ready to step into the market and intervene just yet. Then again, it's not like they have much policy room at this stage so you can understand why.
But let's see how their hand will be forced if the situation continues to worsen in time.
