Bank of Japan sees recovery on horizon
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AFP
Oluşturulma Tarihi: Mayıs 23, 2009 00:00
TOKYO - Japan's worst post-war recession appears to be easing, the central bank said Friday as it upgraded its assessment of the economy for the first time in almost three years.
"We are now gradually leaving the situation where things are in freefall," said Bank of Japan, or BoJ, governor Masaaki Shirakawa.
Japan suffered its sharpest contraction on record in the three months to March, with gross domestic product, or GDP, shrinking 4 percent compared with the previous quarter.
Hopes are growing that the slump will mark the trough in the recession. "Our expectation is that the April-June GDP growth figure will show a significant improvement compared to the January-March figure," Shirakawa said after the BoJ left its key interest rate on hold at 0.1 percent.
But he added: "The outlook remains highly uncertain. We have to carefully monitor the situation by paying close attention to downside risks."
With little room left to reduce rates further, the BoJ is turning to alternative tools to spur lending.
It said Friday it was expanding the type of debt it will accept from banks in return for emergency funds to include bonds issued by the governments of the United States, Britain, Germany, and France.
"Conditions have been deteriorating, but exports and production are beginning to level out," it said in a statement. "Although domestic private demand is likely to continue to weaken, exports and production are expected to start recovering."
Japan suffered its sharpest contraction on record in the three months to March, with gross domestic product, or GDP, shrinking 4 percent compared with the previous quarter.
Hopes are growing that the slump will mark the trough in the recession. "Our expectation is that the April-June GDP growth figure will show a significant improvement compared to the January-March figure," Shirakawa said after the BoJ left its key interest rate on hold at 0.1 percent.
But he added: "The outlook remains highly uncertain. We have to carefully monitor the situation by paying close attention to downside risks."
With little room left to reduce rates further, the BoJ is turning to alternative tools to spur lending.
It said Friday it was expanding the type of debt it will accept from banks in return for emergency funds to include bonds issued by the governments of the United States, Britain, Germany, and France.
"Conditions have been deteriorating, but exports and production are beginning to level out," it said in a statement. "Although domestic private demand is likely to continue to weaken, exports and production are expected to start recovering."