Japan outlook dims, rate stays
By Shino Yuasa |
April 8, 2011, Friday
|
Print Edition
Print Edition
THE Bank of Japan downgraded its outlook for Japan's economy yesterday due to the fallout from the March 11 earthquake and tsunami, and kept its key interest rate unchanged at near zero.
The twin disasters destroyed scores of factories in northern Japan, crippling supply chains that caused severe shortages of goods ranging from auto components to dairy products.
The central bank warned of a slump in Japanese exports and stagnant demand, giving a bleak forecast for the world's No. 3 economy, which had been on the course to recovery before the March 11 quake.
"Japan's economy is under strong downward pressure, mainly on the production side, due to the effects of the earthquake disaster," the bank said, adding that the outlook would remain as such "for the time being."
Just one month before the earthquake, the BOJ said the Japanese economy was emerging from a deceleration phase with growth in exports and production.
Then came the March 11 earthquake - the worst ever in Japanese history. It spawned a tsunami that slammed into the northeastern coast with such force that it all but wiped out the region, killing as many as 25,000 people.
It also upended Tokyo Electric Power Co's nuclear power plant in Fukushima, causing a dangerous radiation leak that seeped into Tokyo's tap water and the Pacific Ocean and took weeks to control.
The twin disasters destroyed scores of factories in northern Japan, crippling supply chains that caused severe shortages of goods ranging from auto components to dairy products.
The central bank warned of a slump in Japanese exports and stagnant demand, giving a bleak forecast for the world's No. 3 economy, which had been on the course to recovery before the March 11 quake.
"Japan's economy is under strong downward pressure, mainly on the production side, due to the effects of the earthquake disaster," the bank said, adding that the outlook would remain as such "for the time being."
Just one month before the earthquake, the BOJ said the Japanese economy was emerging from a deceleration phase with growth in exports and production.
Then came the March 11 earthquake - the worst ever in Japanese history. It spawned a tsunami that slammed into the northeastern coast with such force that it all but wiped out the region, killing as many as 25,000 people.
It also upended Tokyo Electric Power Co's nuclear power plant in Fukushima, causing a dangerous radiation leak that seeped into Tokyo's tap water and the Pacific Ocean and took weeks to control.
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