Bank of Japan News:

https://www.yahoo.com/finance/news/bank-japan-says-ready-ease-073952329.html

Article:

RIYADH, Feb 22 (Reuters) - The Bank of Japan is ready to ease monetary policy without hesitation, but there is no change in the central bank's view that the Japanese economy is recovering moderately, its governor, Haruhiko Kuroda, said on Saturday.

Japan's economy is unlikely to slump sharply despite uncertainty over the impact of the coronavirus outbreak, Kuroda said on the sidelines of a conference in Riyadh.

Finance leaders of the world's 20 largest economies have gathered in Riyadh this weekend to discuss economic policies and the impact of the virus on global economic growth.

Japan ranks second in the world after China for the number of confirmed virus cases because of an outbreak on a cruise ship.

Comments:

Yes, all things considered, the Japanese economy, was, maybe still is, on a moderate recovery. but is the problem with the idea of moderate recovery. It seems "moderate recovery" is used a lot instead of just saying the economy is growing, the economy is moving forward, the economy is headed in the right direct. "Moderate recovery" seems to be a safe phrase to use instead of something maybe a little more optimistic.

But, at the same time, there has been of course, the sales tax increase, global trade still not as good as everyone wants or expects, business investment maybe not as good as everyone wants, and of course related to, but just in 2014 and 2019, consumer spending is always one of the biggest concerns for the Bank of Japan.

As said in previous comments, the current and past consumer spending, at the level it is at, maybe should be considered the "new normal" and stop trying to expect consumer spending to spur inflation to the 2% level.

The same can be said for inflation. The idea that the Japanese economy can get to 2% just might not be realistic. Yes everyone would want 2%, as shows a certain level of economic activity in an economy including more consumer spending and more demand, but maybe at this point, it is not going to happen and maybe 1% might be the "new normal' or even the "realistic normal" for the current economic situation.

Of course you add in the virus situation and that changes everything.

This article was written on Feb. 22. At that time, South Korea was just beginning to see an explosion of virus cases, and most in one city or region only, not in Seoul etc. Since then South Korea is the second most in the world with virus cases.

© 2020, Tom Metts, all rights reserved