BoJ Elevates Economic Health Over Inflation

The 32 branches of the Bank of Japan, the country’s central bank, have embarked on an emergency survey of companies in each district to grasp the impact of the intensifying trade war on exports and supply chains, Nikkei reported. The memories of the 2008 financial crisis remain vivid among Japan’s central bankers. Japanese companies are especially vulnerable to a slump in trade, with many shipping materials and industrial equipment throughout the world. After the collapse of Lehman Brothers, none of the leading countries suffered as much as Japan in terms of the drop in industrial output. As the US-China trade war casts a shadow over the global economy, and as such new concerns as Turkey’s lira crisis emerge, the BoJ is shifting focus to protecting the domestic economy and putting its long-held inflation goal on the back burner. This shift was behind the central bank’s adjustment to its large-scale monetary easing policy in late July. The bank let the benchmark long-term policy rate fluctuate more widely around zero.