BOJ’s Wakatabe: Timing of Japan’s economic recovery will be delayed

Bank of Japan (BOJ) Deputy Governor Masazumi Wakatabe is back on the wires now, via Reuters, raising doubts on the Japanese economic recovery.

Key quotes

Climate change could put downward pressure on prices, economy short-term.

Given pressure economy may face from climate change, economic policy must be more accommodative.

Timing of Japan’s economic recovery will be delayed.

I see heightening downside risk to my prior view that progress in vaccination will help Japan’s economy recover.

If economy worsens sharply, BOJ will obviously need to consider taking additional steps.

What steps to take to support economy will depend on economic conditions at the time.

BOJ will be prepared with means to ease further as needed.

Consumption stalling but not falling sharply, economy supported by exports, capex.

For cost-push inflation to broaden across Japan, we must see households and firms spend more of their savings.