Japan’s central bank yesterday raised its forecasts for Japan’s growth the 2010 fiscal year and for consumer prices, while leaving its key rate near zero in an ongoing battle with deflation.
The Bank of Japan’s decision to hold rates comes as it weighs the impact of a monetary easing program that includes a ¥5 trillion (US$61 billion) asset purchase scheme to lower borrowing costs and tackle deflation.
The bank also maintained its earlier forecast that consumer prices would continue falling until the start of the 2011 fiscal year in April, but raised its inflation expectations for the 2011 fiscal year to reflect rising commodity prices.
“Japan’s economy still shows signs of a moderate recovery, but the recovery seems to be pausing,” the central bank said in a statement, keeping its broad assessment unchanged.
The policy board voted unanimously at the end of a two-day meeting to leave its key rate in the 0 percent to 0.1 percent range.
Japan remains mired in crippling deflation, as falling prices prompt consumers to hold off on purchases in the expectation of further price drops, clouding future corporate investment.
The bank stuck to its view deflation will end in fiscal 2011, but said the core consumer price index, excluding volatile food items, would rise 0.3 percent, instead of the previously forecast 0.1 percent, because of higher commodity prices.
And it maintained its earlier projection for prices to increase 0.6 percent in fiscal 2012, as the economy gradually overcomes deflationary pressures that have dragged down growth.
“The bank’s baseline scenario predicts that Japan’s economy is expected to gradually overcome the deceleration in the pace of improvement and return to a moderate recovery path,” the bank said in a statement. “The growth rate of the global economy is likely to start increasing again, led by emerging and commodity exporting economies.”
The bank also raised its growth assessment for fiscal 2010 to 3.3 percent, from an earlier forecast of 2.1 percent despite its own assessment that exports were “somewhat weak.”
The government last week raised its economic assessment for the first time in seven months, citing signs of exports being supported by firm demand in Asia.
While economists expect a slight contraction in the final quarter of last year, the reviving regional demand picture is expected to keep Japan’s growth ticking along at a modest pace next year.
However, analysts said that the bank may yet be forced to ease policy further this year, such as by expanding its asset-purchasing program.
The bank’s “economic forecasts are highly dependent on positive developments overseas and look increasingly over-optimistic,” research consultancy Capital Economics said. “While monetary policy may be on hold for now, we continue to expect it to be loosened further by year-end.”
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last