The difficulties that Asia faces in pulling out of an accelerating economic slump were thrown in stark relief by developments in three of its most important economies on Friday.
Singapore and Taiwan each reported sharp economic contractions in the third quarter that were among their worst in decades. Both countries are suffering from having made a specialty of manufacturing electronics and high-technology goods for export, largely to the US and Japan, a sector that is slumping badly.
Exports account for half of Taiwan's economic output, which shrank by 4.2 percent in the third quarter from the comparable period last year. Singapore depends on exports for more than nine-tenths of its economy, and it experienced an even sharper fall, 5.6 percent, from the quarter a year ago.
Japan is heavily export-dependent as well, but its economy is many times the size of Singapore's or Taiwan's, and its gross domestic product is not falling nearly so steeply. Still, policy makers here face a deepening impasse on how to combat the country's latest recession, its fourth in a decade.
Despite the economic weakness and accelerating deflation, the Bank of Japan concluded a two-day policy meeting on Friday with a decision to leave monetary policy unchanged, again dismissing calls by political leaders and some economists for radical measures to stimulate investment and demand.
To be sure, the bank has no room left to cut short-term interest rates; they are already effectively at zero, and further tinkering, like the bank's move in September to trim its discount rate to 0.1 percent, would be merely symbolic.
Similarly, the bank decided on Friday to maintain a surplus of ?6 trillion (US$49 billion) in the money market, but its policy has so far generated very little new borrowing, and there is no sign that continuing it will have any greater effect.
Critics of the bank's conservatism have urged it to take unconventional steps like setting an explicit inflation target and buying more government debt, but the bank's governor, Masaru Hayami, has resisted.
Hayami and other members of the bank's board say monetary policy alone cannot pull the economy out of its deflationary funk. The government must take difficult and unpopular steps that it has avoided, they say, including forcing Japan's banks to rapidly write off the estimated US$500 billion in nonperforming loans they hold and push deadbeat debtors into restructuring or bankruptcy.
"To make our policy-easing steps fully effective, it's essential to resolve banks' bad loan problems and push for structural reforms of the financial system, economy and industries," Hayami told a meeting of bankers earlier this month.
In its latest economic forecast, the bank said it expects consumer prices to fall more than 1 percent annually for the next two years if the government's policy remains unchanged. They have already fallen for 25 straight months.
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