TOKYO (MNI) – The Bank of Japan on Wednesday upgraded its
assessment of the current economic climate for the first time in nine
months, expecting the economy to move out of what appears to be a
temporary slump in the final quarter of last year.
“Japan’s economy is gradually emerging from the current
deceleration phase,” the BOJ said in its monthly economic report for
February, noting brighter prospects for exports and production.
In January, the BOJ said, “Japan’s economy still shows signs of a
moderate recovery, but the recovery seems to be pausing.”
Looking ahead, the BOJ more or less maintained its cautious
optimism, saying Japan’s economy “is expected to emerge from the current
deceleration phase and return to a moderate recovery path.”
The bank noted that Japan’s “exports and production are showing
signs of resuming an uptrend.”
“Exports are expected to increase moderately, reflecting the
improvement in overseas economic conditions,” it said, repeating its
recent statement. “Production is expected to increase moderately.”
The BOJ said the pace of the year-on-year decline in consumer
prices is expected to slow as the aggregate supply and demand balance
improves gradually.
At the latest two-day policy-setting meeting that ended on Tuesday,
the BOJ board voted unanimously to continue the bank’s very stimulative,
practically zero interest rate policy by maintaining the target for the
overnight call loan rate among commercial banks at zero to 0.1%.
BOJ Governor Masaaki Shirakawa at a post-meeting news conference on
Tuesday repeated his recent view that upside and downside risks to Japan
remain largely balanced, adding that there is no need to change the BOJ
board’s update to its medium-term growth and inflation outlook that was
provided last month.
tokyo@marketnews.com
** Market News International Tokyo Newsroom: 81-3-5403-4833 **
[TOPICS: M$J$$$,M$A$$$,MMJBJ$,MAJDS$]
