Key to the Macro: the Central Bank of Japan or more pessimistic about Japanese economic activities

On 24 July, Marcel Thieliant, head of the Macro-Asia-Pacific region, said that the Central Bank of Japan might be more pessimistic about Japan’s economic activities, while maintaining interest rates at next week’s meeting. Thieliant noted that, although the Central Bank of Japan had considered that the downside risk of economic activity had diminished in June, “we believe that the subsequent further increase in crude oil prices has undermined the Bank's optimism”. Thieliant added that, at the same time, the Central Bank of Japan “will certainly insist on its view that its inflation risk is upwards”. It is expected that the Bank of Japan will increase the policy rate to 1.25 per cent in October. Kim Xian