Monday December 15, 02:26 AM
Bank chief says Japan's economy may shrink next year: report
 |
TOKYO (AFP) - Japan's central bank chief has warned that Asia's biggest economy may contract in the next fiscal year starting in April, according to a newspaper report Monday.
"The global economy has changed a lot," Bank of Japan governor Masaaki Shirakawa was quoted as saying by the Financial Times. "I think the economy for fiscal year 2009 may turn negative."
The central bank reported Monday that business confidence among major Japanese manufacturers plunged to the lowest level in six years in the three months to December as the economic crisis deepened.
Shirakawa said the Japanese economy was "relatively immune" to turbulence in global credit markets, but "the picture changed after the collapse of Lehman Brothers (NYSE: LEH - news) ," which sparked chaos on world stock markets.
"We are stressing the extraordinarily unusual uncertainty of our predictions," he was quoted as saying. "Risk factors, or uncertainty, are enormous."
Shirakawa said Japanese exports and domestic demand had weakened and he expects "this situation to persist over the next several quarters."
He refrained from commenting on possible intervention in the market to prevent the yen from advancing further against the dollar, only saying: "We continue to monitor markets closely and cooperate as appropriate."
On Friday, the Japanese yen surged to a 13-year high against the dollar after the US Senate rejected a bailout plan for the ailing auto sector.
Traders are waiting to see whether the Bank of Japan will take fresh action to pump up the economy at its monetary policy board meeting on Thursday and Friday.
Last month, the central bank left its key interest rate unchanged at 0.3 percent, three weeks after reducing borrowing costs for the first time in seven years to tackle the worsening recession.
|
|
|
Send Article by Email
Send Article by IM
Blog This with Y! 360
Printable View
