Bank of Japan warns about slowing economic growth

TOKYO - Agence France-Presse

Bank of Japan Gov Masaaki Shirakawa leaves the bank in Tokyo after a news conference yesterday. REUTERS photo

The Bank of Japan (BoJ) yesterday left its key rate unchanged at between zero and 0.1 percent, and held steady on monetary policy despite increasing concerns over a high yen and the global economy.

In its assessment, the BoJ warned Japan’s growth was slowing amid uncertainty abroad and market turmoil caused by the eurozone crisis.

Japan’s economy “has continued picking up, but at a more moderate pace mainly due to effects of a slowdown in overseas economies,” the BoJ said, adding: “The sovereign debt problem in Europe could result in weaker growth not only in the European economy but also in the global economy, particularly through its effects on global financial markets.”

Effects from overseas

Japan will “face an adverse effect from the slowdown in overseas economies and the appreciation of the yen as well as from the flooding in Thailand,” according to the central bank

The BoJ policy board voted unanimously to keep the main rate unchanged between zero and 0.1 percent.

The central bank last month announced further easing measures to help safeguard a fragile economic recovery from the impact of a strong yen and a slowing global economy.

In October the bank said it would boost its asset buying program by 5 trillion yen to 55 trillion yen ($713 billion), with the extra money earmarked for the purchase of Japanese government bonds.

By pouring liquidity into the market, the BoJ hopes to improve flows to help encourage investment and boost business. It also hopes, by relaxing credit conditions, to put downward pressure on the yen