Bank of Japan strikes less-optimistic tone on economy

GMT 06:23 2014 Tuesday ,07 October

Arab Today, arab today Bank of Japan strikes less-optimistic tone on economy

Bank of Japan
Tokyo - AFP

The Bank of Japan on Tuesday struck a less optimistic tone on its view of the world's number three economy, but it held off launching fresh monetary easing measures after a two-day meeting.
The central bank, which has been upbeat on Japan's prospects, flagged housing and industrial production as weak spots in a statement outlining its unanimous decision.
It added that an uptick in business sentiment has "paused" on the back of an April sales tax hike that led to a sharp contraction in second-quarter gross domestic product.
"Japan's economy has continued to recover moderately as a trend," the BoJ statement said, but it noted "some weakness, particularly on the production side" as demand dived after the introduction of April's sales tax hike.
Investors will now turn their focus to governor Haruhiko Kuroda's post-meeting comments as speculation increases that the BoJ will be forced to act as the economy continues to struggle.
Kuroda's upbeat take on Japan's economy has appeared increasingly at odds with the official data, as Japan's economy suffered in the April-June quarter its deepest contraction since the 2011 quake-tsunami.
The rise was seen as crucial to chopping a mammoth public debt but economists warned it could derail a budding recovery in an economy beset by years of deflation.
The 1.8 percent dip in gross domestic product -- or a 7.1 percent contraction at an annualised rate -- gave the clearest picture yet of the tax hike's impact, and threw into question Tokyo's plans for another rise next year.
Millions of shoppers made a last-minute dash to stores before prices went up on April 1, which was followed by a slump in spending.


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