Economic downgrade may force BOJ to act
Source: Agencies |
August 29, 2012, Wednesday
|
Print Edition
Print Edition
JAPAN'S government yesterday cut its assessment for the export-reliant economy for the first time in nearly a year as slowing global growth weighed on exports, clouding recovery prospects and adding pressure on the central bank for further stimulus.
Deceleration in the United States and China, on top of Europe's debt crisis, caused the downgrade, the government said, warning that further global slowdown and sharp market swings posed risks to the world's third-largest economy.
The first such downgrade since October 2011 matches the assessment of private-sector analysts, but is somewhat bleaker than the view of the Bank of Japan, which has said the economy is starting to pick up moderately.
"Looking at both domestic demand and overseas economies, I don't expect the economy to slide back into a recession but I cannot say it will stage a recovery either," said Yasuo Yamamoto, senior economist at Mizuo Research Institute in Tokyo, adding that Japan may enter a soft-patch in the third quarter.
The government assessment underscores policymakers' concern that fresh stimulus measures could be needed, as exports may struggle to recover before the effect on the economy of spending on rebuilding from last year's earthquake begins to fade.
Japan's economy has outpaced growth of most G7 countries on robust private consumption and reconstruction spending. But July trade data showed the sharpest drop in exports since January, in line with trends seen among other export-driven economies in Asia, casting doubt on the country's recovery prospects.
The BOJ frets that the timing of a recovery may be delayed, but wants to hold off on easing monetary policy again unless risks heighten enough to kill any chance of a recovery.
Some analysts expect the next monetary easing to come on October 30, when the BOJ issues fresh long-term economic and growth projections.
Deceleration in the United States and China, on top of Europe's debt crisis, caused the downgrade, the government said, warning that further global slowdown and sharp market swings posed risks to the world's third-largest economy.
The first such downgrade since October 2011 matches the assessment of private-sector analysts, but is somewhat bleaker than the view of the Bank of Japan, which has said the economy is starting to pick up moderately.
"Looking at both domestic demand and overseas economies, I don't expect the economy to slide back into a recession but I cannot say it will stage a recovery either," said Yasuo Yamamoto, senior economist at Mizuo Research Institute in Tokyo, adding that Japan may enter a soft-patch in the third quarter.
The government assessment underscores policymakers' concern that fresh stimulus measures could be needed, as exports may struggle to recover before the effect on the economy of spending on rebuilding from last year's earthquake begins to fade.
Japan's economy has outpaced growth of most G7 countries on robust private consumption and reconstruction spending. But July trade data showed the sharpest drop in exports since January, in line with trends seen among other export-driven economies in Asia, casting doubt on the country's recovery prospects.
The BOJ frets that the timing of a recovery may be delayed, but wants to hold off on easing monetary policy again unless risks heighten enough to kill any chance of a recovery.
Some analysts expect the next monetary easing to come on October 30, when the BOJ issues fresh long-term economic and growth projections.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
