Breaking News
LAST CHANCE for Cyber Monday SALE: Up to 54% off InvestingPro! Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

BOJ more downbeat on exports, output even as recovery seen on track

EconomySep 22, 2021 05:11AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: A man wearing a protective mask walks past the headquarters of Bank of Japan amid the coronavirus disease (COVID-19) outbreak in Tokyo, Japan, May 22, 2020.REUTERS/Kim Kyung-Hoon

By Leika Kihara and Tetsushi Kajimoto

TOKYO (Reuters) -The Bank of Japan on Wednesday offered a bleaker view on exports and output as Asian factory shutdowns caused supply bottlenecks, but maintained its optimism that robust global growth will keep the economic recovery on track.

Bank of Japan Governor Haruhiko Kuroda also brushed aside fears that the debt problems of China Evergrande Group could disrupt the global financial system, saying it was still "an individual company's problem and that of China's real estate sector."

"We need to keep an eye out on whether this affects global markets. But for now, I don't see this turning into a global, bigger problem," Kuroda told a briefing, when asked about market jitters over the fate of Evergrande.

As widely expected, the BOJ maintained its short-term interest rate target at -0.1% and that for 10-year bond yields around 0% at its two-day rate review that ended on Wednesday.

The BOJ also decided on the details of its green finance scheme, which will begin disbursing loans in December.

While the central bank stuck to its view the economy is picking up as a trend, it offered a bleaker view on exports and output as Asian factory shutdowns caused by the coronavirus pandemic forced some manufacturers to slash production.

"Exports and factory output continue to increase, although they are partly affected by supply constraints," the BOJ said in a statement. That was a gloomier view than in July, when it said exports and output "continued to increase steadily."

The supply chain disruption adds to woes for Japan's fragile recovery, which has been hobbled by weak consumption as state of emergency curbs to combat the pandemic keep households from boosting spending.

Kuroda said there was uncertainty on how long the supply constraints could last. He also said the weakness in consumption in July through August, when infection cases surged, was "somewhat unexpected."

But he stressed that continued strength in U.S. and Chinese growth, as well as steady progress in inoculations, will help Japan's economy recover from the pandemic-induced slump.

"As the pandemic's impact subsides, we expect consumption to strengthen," Kuroda said. "While growth may be undershooting projections somewhat, the foundations for a recovery are intact."

Robust global demand has benefitted Japanese manufacturers and boosted exports, offsetting the hit to consumption from curbs on activity to combat the pandemic.

The slowdown in exports and output, if prolonged, could threaten the BOJ's rosy projection of an export-driven recovery, some analysts say.

Japan's weak growth and low inflation have reinforced market expectations the BOJ will lag behind other major central banks in dialing back crisis-mode monetary support.

BOJ more downbeat on exports, output even as recovery seen on track
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email