Moody's Analyst: The economic outlook of the Bank of Japan is hawkish

Moody's analyst Stefan Angrick stated that the economic outlook of the Bank of Japan is relatively hawkish. Predictions for economic growth and inflation indicate that the bank will still raise interest rates in the near future. Apart from a slight upward adjustment to growth forecasts for fiscal year 2025 and a slight downward adjustment to inflation forecasts, these predictions have hardly changed.

Angrick said: "The Bank of Japan believes that the Japanese economy has been moderately recovering, with a growth rate higher than its potential." He added that the Bank of Japan stated consumer spending is on a "moderate growth trend", which differs from the term "resilience" used in July. He pointed out that these cautiously optimistic assessments contradict poor data over the past year. "The Japanese economy is stagnating, and there is still little evidence of demand-driven price pressure."