BoJ Deputy Governor Masayoshi Amamiya said in a speech that “Japan’s economy is likely to continue on an expanding trend, albeit at a moderate pace.” Currently, downside risks, “mainly regarding developments in the global economy” require the “most attention”. “Exports and production are projected to continue showing some weakness for the time being, with a pick-up in the global economy being delayed.”
But the impact of global slowdown on domestic demand “has been limited so far”, with growth in all three sectors of corporate, household and public sectors. While growth in domestic demand would “decelerate temporarily” due to global slowdown and consumption tax hike, it will remain firm in “somewhat longer-term perspective”.
Nevertheless, Amamiya reiterated BoJ’s usual message. “In a situation where downside risks to economic activity and prices, mainly regarding developments in overseas economies, are significant, the Bank will not hesitate to take additional easing measures if there is a greater possibility that the momentum toward achieving the price stability target will be lost.”