BOJ stresses ‘relatively mild’ impact from China’s slowdown
Print Edition
THE Bank of Japan maintained its upbeat assessment for all nine of the country’s regional economies and stressed that the pain from China’s slowdown was limited for now, suggesting that it saw no immediate need to expand monetary stimulus further.
But four regions, including western and central areas home to big Japanese auto and electronics goods exporters, offered a gloomier view on output than three months ago, underscoring the fragile nature of Japan’s recovery.
The market volatility have had a very big impact on companies, Atsushi Miyanoya, head of the BOJ’s branch overseeing the Kinki western Japan region, said yesterday.
But he stressed the slowdown in China, which suffered the weakest growth since 2009 in the July-September period, has yet to hit exporters in western Japan that much, pointing to a pickup in shipments of smartphone parts and car batteries.
The Tokai region in central Japan, home to auto giant Toyota Motor Corp, also saw weak exports to China offset by brisk shipments to the United States.
“The impact from China’s slowdown has been relatively mild,” said Toru Umemori, the BOJ’s branch manager overseeing the Tokai region.
In a quarterly report issued yesterday, the BOJ maintained its view that Japan’s regional economies were recovering, with strength in capital expenditure and consumption offsetting weakness in external demand.
Retailers in regional Japan were also helped by Chinese tourists who, undeterred by China’s market rout in August, continued to flock to Japanese shops for goods ranging from cosmetics to diapers, BOJ branch managers said.
Japan’s economy contracted in the April-June quarter and some analysts expect it to have shrunk again in the July-September period as China’s slowdown and rising grocery costs hurt exports and consumption.
The government cut its assessment of the economy last week, warning that some parts of the recovery have dwindled due to weak overseas demand.
Such weak signs in the economy have kept alive market hopes that the BOJ may expand its already massive stimulus programme at its rate review next week.
BOJ Governor Haruhiko Kuroda kept his optimism on the outlook for achieving his 2 percent inflation target.
“Japan’s economy is expected to continue recovering moderately,” he told the branch managers’ meeting, signalling the economy can weather the pain from soft external demand without additional monetary easing.
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