Bank of Japan to roll back monetary policy easing, majority of economists say

According to more than 90% of economists polled by Reuters, the Bank of Japan is more likely to roll back large-scale monetary policy easing as its next policy move. Nevertheless, most of them believe that such a change is unlikely until the second half of 2023.

In a survey conducted between November 15 and 25, 24 of 26 economists suggested that the Bank of Japan's next move, if any, would be to roll back super-soft monetary policy.

Twenty of them said the Bank of Japan would not take that step until the second half of 2023 or even later. 

Takumi Tsunoda, senior economist at the Shinkin Central Bank Research Institute, stressed that the Japanese economy has not yet fully recovered from the recession caused by the pandemic. Therefore, any early curtailment of easing would result in a loss of opportunity for further recovery.

He added that unlike in the U.S. or Europe, there is no reason for the BoJ to hasten tightening, as the pace of yen weakening has slowed and consumer inflation here remains moderate if food and energy commodities are excluded.