• To fully watch risk of yen rise vs euro having negative impact on Japan economy
• Europe debt woes remain biggest risk to Japan economy
• Europe woes already affecting Japan economy via various channels
• Yen rise vs euro could hurt Japan economy via corporate revenues, sentiment
• Global fund strains easing somewhat but market uncertainty remains strong
• Further worsening of Europe debt situation may trigger global credit crunch
• Japan trade deficit likely due to temporary factors such as rising cost of fuel
• Do not see Japan heading for a current account deficit