BOJ starts policy meeting, may upgrade economic assessment+

TOKYO, Sept. 16 Kyodo - The Bank of Japan's Policy Board began a two-day meeting Wednesday at which it is expected to leave the central bank's key interest rate unchanged at 0.1 percent but could upgrade the BOJ's economic assessment, given recent signs of
economic recovery.
At its previous policy meeting in August, the BOJ maintained its cautious
economic outlook, saying Japan's economy had ''stopped worsening'' due to
pickups in exports and output but that the outlook was attended by a
''significant level of uncertainty.''
The BOJ's Policy Board may decide to upgrade the central bank's economic
assessment for the first time since July in view of recent positive economic
data, sources close to the matter said.
Japan's economy marked its first expansion in five quarters in April-June,
confirming that the nation's economy is recovering from the worst recession in
decades.
But some BOJ officials remain cautious about upgrading the assessment as a
deteriorating job market and sluggish consumption are casting a cloud over the
prospects for the economy, the sources added.
According to recent government data, Japan's seasonally adjusted unemployment
rate reached an all-time high of 5.7 percent in July, while the average monthly
salary continued to fall for the 14th straight month.
Consumer prices also continued to fall at the fastest pace on record in the
same month, boosting fears of deflation.
The BOJ is also tasked with deciding whether to continue or terminate temporary
measures aimed at supporting corporate financing, such as the outright purchase
of corporate debt from banks, after the steps expire at the end of this year.
Some BOJ Policy Board members have said in recent speeches that there is no
preset idea on the matter.
In July, the BOJ's Policy Board decided to extend the measures for three months
from the previous deadline of Sept. 30 to Dec. 31, judging that corporate
financing conditions remain severe.
==Kyodo
2009-09-16 22:49:20