BOJ
The Bank of Japan's chief economist said the global slowdown and inflation are “big concerns'' that present dual risks for the world's second-largest economy.
“It's like a tiger is waiting at the front of the gate and a wolf is at the back,'' Kazuo Momma, the central bank's head of research and statistics, said in a panel discussion in Tokyo today. “We need to be very careful not to be eaten by them.''
Momma said Japan's terms of trade are worsening as import costs rise and growth will slow for some time before eventually picking up. The central bank last month shelved a policy of gradually raising interest rates and slashed its growth forecast as record energy prices squeeze companies and consumers.
“We certainly do not expect the BOJ to hike policy rates this year,'' said Kenichi Kawasaki, chief economist at Lehman Brothers Japan Inc direct payday loan cash advance. in Tokyo. “The deterioration of corporate profits can be expected to depress corporate appetite for capital expenditure, while we also expect a decline in salary bonuses to have a negative impact on wages and consumption.''
The Bank of Japan has kept its benchmark overnight lending rate at 0.5 percent, the lowest in the industrialized world, since doubling it in February 2007. Only two of 31 economists surveyed by Bloomberg News this month predict the bank will raise rates this year. The remaining 29 expect no change.
Filed under: finance by Finance Boss