ID :
38988
Mon, 01/05/2009 - 20:35
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http://m.oananews.org//node/38988
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BOJ likely to project negative economic growth in FY 2009
TOKYO, Jan. 5 Kyodo -
The Bank of Japan is close to a decision to downgrade the prospects for the
country's economy and forecast negative growth in the next fiscal year due to
the global economic slowdown amid the financial crisis, sources close to the
matter said Monday.
The central bank, which will hold a policy meeting Jan. 21 and 22, is expected
to revise lower the 0.6 percent growth projected in October in terms of real
gross domestic product to around minus 1 percent, the sources said.
The projection by the BOJ may be well below that of the government, which has
said the Japanese economy is likely to log zero percent growth in the year
starting in April against the backdrop of its economic stimulus packages.
While companies face difficulties raising capital in financial markets due to
the credit crunch toward the end of the current fiscal year through March, the
sluggish outlook may add to pressures on the BOJ to ease credit conditions by
cutting interest rates, they said.
During the policy meeting, the bank will review its biannual Outlook for
Economic Activity and Prices report released in October and verify developments
since November.
The BOJ is also expected to turn its projection for the current fiscal 2008 to
negative, compared with the earlier forecast of 0.1 percent expansion, said the
sources. As for fiscal 2010, the bank will release its first estimate and is
likely to say the country's real GDP growth will return to positive territory
during the year.
The decision to downgrade the growth estimates may come as the economy shows
signs of further deceleration amid slowing exports, weakening output and
sluggish individual consumption.
Business confidence has also been deteriorating, with the bank's Tankan
business sentiment survey showing last month that its key index fell at the
fastest pace in over 30 years during the September-December period as a result
of the worldwide economic slump.
The bank has lowered its basic assessment of the Japanese economy, adopting the
word ''deteriorating'' last month in its monthly report for the first time in
over six years.
In order to prop up the flagging economy, the BOJ has cut its key interest rate
twice over the past three months, now setting the benchmark cost of interbank
borrowing at 0.1 percent.
In December, the BOJ also announced its plan to purchase commercial paper, or
short-term debt issued by companies, to support corporate finance.
However, it is likely the central bank will be pressed further to take
additional measures to help firms raise necessary funds to cover the end of
fiscal 2008, as well as steps to improve the balance sheets of financial
institutions, such as by purchasing their shareholdings whose values have
sharply fallen amid the crisis.
==Kyodo
2009-01-05 22:09:47
The Bank of Japan is close to a decision to downgrade the prospects for the
country's economy and forecast negative growth in the next fiscal year due to
the global economic slowdown amid the financial crisis, sources close to the
matter said Monday.
The central bank, which will hold a policy meeting Jan. 21 and 22, is expected
to revise lower the 0.6 percent growth projected in October in terms of real
gross domestic product to around minus 1 percent, the sources said.
The projection by the BOJ may be well below that of the government, which has
said the Japanese economy is likely to log zero percent growth in the year
starting in April against the backdrop of its economic stimulus packages.
While companies face difficulties raising capital in financial markets due to
the credit crunch toward the end of the current fiscal year through March, the
sluggish outlook may add to pressures on the BOJ to ease credit conditions by
cutting interest rates, they said.
During the policy meeting, the bank will review its biannual Outlook for
Economic Activity and Prices report released in October and verify developments
since November.
The BOJ is also expected to turn its projection for the current fiscal 2008 to
negative, compared with the earlier forecast of 0.1 percent expansion, said the
sources. As for fiscal 2010, the bank will release its first estimate and is
likely to say the country's real GDP growth will return to positive territory
during the year.
The decision to downgrade the growth estimates may come as the economy shows
signs of further deceleration amid slowing exports, weakening output and
sluggish individual consumption.
Business confidence has also been deteriorating, with the bank's Tankan
business sentiment survey showing last month that its key index fell at the
fastest pace in over 30 years during the September-December period as a result
of the worldwide economic slump.
The bank has lowered its basic assessment of the Japanese economy, adopting the
word ''deteriorating'' last month in its monthly report for the first time in
over six years.
In order to prop up the flagging economy, the BOJ has cut its key interest rate
twice over the past three months, now setting the benchmark cost of interbank
borrowing at 0.1 percent.
In December, the BOJ also announced its plan to purchase commercial paper, or
short-term debt issued by companies, to support corporate finance.
However, it is likely the central bank will be pressed further to take
additional measures to help firms raise necessary funds to cover the end of
fiscal 2008, as well as steps to improve the balance sheets of financial
institutions, such as by purchasing their shareholdings whose values have
sharply fallen amid the crisis.
==Kyodo
2009-01-05 22:09:47
