ID :
12552
Tue, 07/15/2008 - 16:10
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https://oananews.org//node/12552
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BOJ starts policy meeting, likely to cut Japan's growth estimate
TOKYO, July 15 Kyodo - The Bank of Japan started its two-day policy meeting Monday amid expectations that the central bank will downgrade its estimate for the country's economic growth in the current fiscal year, stressing further inflationary risks.
The BOJ's Policy Board is widely expected to decide to keep its ey interest rate on hold at 0.5 percent on Tuesday.
The bank is likely to say in a monthly report to be released after the policy panel meeting that the Japanese economy has ''deviated downward'' from its earlier projection in the biannual Outlook for Economic Activity and Prices report released in April, sources close to the matter said.
The BOJ said in April that the world's second-biggest economy would grow an annual 1.5 percent in fiscal 2008. It represented a downward revision from the estimate in the previous report in October of 2.1 percent growth in real gross domestic product terms.
The central bank, however, is unlikely to publicize specific numbers in the monthly report due out Tuesday.
On prices, the BOJ will point to growing inflationary pressures due to recent high oil and other commodity prices and say prices have ''diverged upward,'' the sources said.
In April, the outlook report predicted that Japan's core consumer price index, which excludes volatile fresh food prices, would mark a 1.1 percent rise in the year through March, up from the 0.4 percent hike forecast in October.
The BOJ's move will add to evidence that Japan's economy has been slowing amid uncertainty over the prospect for the global economy following the financial turmoil since last summer and sharp rises in energy and raw material costs.
In its closely watched Tankan business sentiment survey released earlier this month, the BOJ said confidence among large Japanese manufacturers had fallen to its weakest level in nearly five years.
Government data have separately shown that sentiment among merchants and consumers has dropped to new multi-year lows on surging gasoline and food prices.
BOJ Governor Masaaki Shirakawa told the meeting of the central bank's branch mangers on July 7 that inflationary risks are rising at the global level, warning that prices may go higher.
The Policy Board reviews the April outlook report in July and the October report in January. Figures in the reports represent the median estimates made by the nine board members.
The panel now has only seven members as the government has failed to appoint new members with opposition parties having blocked government proposals several times.
Given such a tough environment surrounding the Japanese economy, the BOJ is widely expected to maintain the target rate for unsecured overnight call money on hold at 0.5 percent.
Shirakawa is to hold a news conference after the two-day meeting Tuesday.
The BOJ's Policy Board is widely expected to decide to keep its ey interest rate on hold at 0.5 percent on Tuesday.
The bank is likely to say in a monthly report to be released after the policy panel meeting that the Japanese economy has ''deviated downward'' from its earlier projection in the biannual Outlook for Economic Activity and Prices report released in April, sources close to the matter said.
The BOJ said in April that the world's second-biggest economy would grow an annual 1.5 percent in fiscal 2008. It represented a downward revision from the estimate in the previous report in October of 2.1 percent growth in real gross domestic product terms.
The central bank, however, is unlikely to publicize specific numbers in the monthly report due out Tuesday.
On prices, the BOJ will point to growing inflationary pressures due to recent high oil and other commodity prices and say prices have ''diverged upward,'' the sources said.
In April, the outlook report predicted that Japan's core consumer price index, which excludes volatile fresh food prices, would mark a 1.1 percent rise in the year through March, up from the 0.4 percent hike forecast in October.
The BOJ's move will add to evidence that Japan's economy has been slowing amid uncertainty over the prospect for the global economy following the financial turmoil since last summer and sharp rises in energy and raw material costs.
In its closely watched Tankan business sentiment survey released earlier this month, the BOJ said confidence among large Japanese manufacturers had fallen to its weakest level in nearly five years.
Government data have separately shown that sentiment among merchants and consumers has dropped to new multi-year lows on surging gasoline and food prices.
BOJ Governor Masaaki Shirakawa told the meeting of the central bank's branch mangers on July 7 that inflationary risks are rising at the global level, warning that prices may go higher.
The Policy Board reviews the April outlook report in July and the October report in January. Figures in the reports represent the median estimates made by the nine board members.
The panel now has only seven members as the government has failed to appoint new members with opposition parties having blocked government proposals several times.
Given such a tough environment surrounding the Japanese economy, the BOJ is widely expected to maintain the target rate for unsecured overnight call money on hold at 0.5 percent.
Shirakawa is to hold a news conference after the two-day meeting Tuesday.
