Japan’s worst post-war recession appears to be easing, the central bank said yesterday, upgrading its assessment of the world’s No. 2 economy for the first time in almost three years.
The Bank of Japan (BoJ) also left its key interest rate unchanged at 0.1 percent at a two-day meeting, as widely expected and it expanded the type of debt it will accept from banks in return for emergency funds to include bonds issued by the governments of the US, Britain, Germany and France.
With little room left to reduce rates further, the BoJ is turning to alternative tools to spur lending.
Japan’s economy logged its sharpest contraction on record in the three months to March, shrinking 4 percent compared with the previous quarter, but the BoJ said the recession appeared to be abating.
“Economic conditions have been deteriorating, but exports and production are beginning to level out,” it said in a statement. “Going forward, although domestic private demand is likely to continue to weaken, exports and production, after leveling out, are expected to start recovering and public investment to increase. Therefore, the pace of deterioration in economic conditions is likely to moderate gradually, leading to a leveling out of the economy.”
The assessment was brighter than last month’s view that economic conditions had “deteriorated significantly,” marking the first upgrade since July 2006.
Japan — which suffered an economic slump in the 1990s — posted an unprecedented fourth straight quarter of negative growth in the three months to March.
Japan’s exporters have been hit particularly hard by the current global recession because they produce big ticket items such as cars and televisions that are typically bought on credit by consumers in developed nations.
The country’s auto and high-tech giants have announced massive job cuts in recent months as they sink deep into the red because of the slump in exports.
But most analysts think the economy will stabilize in the current quarter, possibly even returning to positive growth. Exports and factory output both rose slightly in March from the previous month.
Meanwhile, Tokyo has no plans to step into the currency markets to prop up the US dollar, Japan’s finance minister said yesterday, as the yen rose to a new two-month high against the greenback.
“We aren’t at all thinking about intervening in the foreign exchange markets at this point,” Kaoru Yosano told reporters, adding the government was analyzing what is driving the yen higher.
The dollar was trading at ¥93.96 in Tokyo early morning trade, its lowest level since March 19, compared with ¥94.42 in New York late on Thursday.
Super Typhoon Kong-rey is the largest cyclone to impact Taiwan in 27 years, the Central Weather Administration (CWA) said today. Kong-rey’s radius of maximum wind (RMW) — the distance between the center of a cyclone and its band of strongest winds — has expanded to 320km, CWA forecaster Chang Chun-yao (張竣堯) said. The last time a typhoon of comparable strength with an RMW larger than 300km made landfall in Taiwan was Typhoon Herb in 1996, he said. Herb made landfall between Keelung and Suao (蘇澳) in Yilan County with an RMW of 350km, Chang said. The weather station in Alishan (阿里山) recorded 1.09m of
STORM’S PATH: Kong-Rey could be the first typhoon to make landfall in Taiwan in November since Gilda in 1967. Taitung-Green Island ferry services have been halted Tropical Storm Kong-rey is forecast to strengthen into a typhoon early today and could make landfall in Taitung County between late Thursday and early Friday, the Central Weather Administration (CWA) said yesterday. As of 2pm yesterday, Kong-Rey was 1,030km east-southeast of Oluanpi (鵝鑾鼻), the nation’s southernmost point, and was moving west at 7kph. The tropical storm was packing maximum sustained winds of 101kph, with gusts of up to 126 kph, CWA data showed. After landing in Taitung, the eye of the storm is forecast to move into the Taiwan Strait through central Taiwan on Friday morning, the agency said. With the storm moving
NO WORK, CLASS: President William Lai urged people in the eastern, southern and northern parts of the country to be on alert, with Typhoon Kong-rey approaching Typhoon Kong-rey is expected to make landfall on Taiwan’s east coast today, with work and classes canceled nationwide. Packing gusts of nearly 300kph, the storm yesterday intensified into a typhoon and was expected to gain even more strength before hitting Taitung County, the US Navy’s Joint Typhoon Warning Center said. The storm is forecast to cross Taiwan’s south, enter the Taiwan Strait and head toward China, the Central Weather Administration (CWA) said. The CWA labeled the storm a “strong typhoon,” the most powerful on its scale. Up to 1.2m of rainfall was expected in mountainous areas of eastern Taiwan and destructive winds are likely
The Central Weather Administration (CWA) yesterday at 5:30pm issued a sea warning for Typhoon Kong-rey as the storm drew closer to the east coast. As of 8pm yesterday, the storm was 670km southeast of Oluanpi (鵝鑾鼻) and traveling northwest at 12kph to 16kph. It was packing maximum sustained winds of 162kph and gusts of up to 198kph, the CWA said. A land warning might be issued this morning for the storm, which is expected to have the strongest impact on Taiwan from tonight to early Friday morning, the agency said. Orchid Island (Lanyu, 蘭嶼) and Green Island (綠島) canceled classes and work
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