BOJ to Consider Upgrading Economic Assessment Amid Pickup

(Bloomberg) -- The Bank of Japan is likely to consider upgrading its economic assessment amid signs of a rebound from the economy’s worst contraction on record last quarter, people familiar with the matter said.

Any changes would acknowledge that Japan’s slump has bottomed, rather than indicate optimism about the outlook, according to the people. BOJ officials continue to see Japan’s economic situation amid the pandemic as severe and highly uncertain, the people said.

Bank officials see little need to take further policy action at this point, as a flurry of measures taken since March have worked to help stabilize financial markets and get credit to companies, according to the people.

In its most recent economic assessment, in July, the BOJ described the economy as being in an “extremely severe situation,” although it said activity was slowly resuming. Bank officials will discuss making changes to the specific wording of the assessment at the end of the next policy meeting Sept. 17, the people said.

Comments earlier this week from BOJ Deputy Governor Masazumi Wakatabe also suggest the board may now see conditions in a slightly less gloomy light.

“Japan’s economy is still in an extremely severe situation but economic activity has shown signs of a pickup, although it remains at a low level,” Wakatabe said in a speech Wednesday.

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