BOJ comments in its latest report on the Japanese financial system
- Financial system has significant buffers against risks
- But uncertainty over the pandemic's outlook, economic impact is very high
- If economic slump persists, financial intermediation may be hurt
- Japan likely to avert rise in corporate default for the time being
The bright spot for the BOJ is that economic conditions in Japan isn't exactly worsening significantly over the past few months, but the road to recovery remains an arduous one and it will be tough for policymakers to restore confidence - especially on inflation.
For now, the above assessment reaffirms that they are unlikely to be intervening with more policy measures given their already limited ammunition at hand currently.
