BoJ lifts assessment of Japan’s economy

TOKYO: The Bank of Japan (BoJ) yesterday upgraded its assessment of the world’s number three economy, saying recovery was firmly underway as Tokyo works to reverse years of lumbering growth.

The announcement comes as the government considers whether to go ahead with a planned sales tax hike that many fear could derail any recovery.

Central bank policymakers said “Japan’s economy is recovering moderately” and held off expanding a massive stimulus programme unveiled in April that has been credited with kickstarting growth and pushing down the value of the yen, in turn boosting exporters.

The bank’s bond-buying scheme is a key part of Prime Minister Shinzo Abe’s plan to reinvigorate the long-suffering economy, dubbed ‘Abenomics’, which also includes huge government spending.

Its comments were a step up from July, when it said the economy was ‘starting to recover moderately’.

The bank added that overseas economies “as a whole are gradually heading toward a pick-up”, providing a fillip to exporters.

The brighter global outlook as well as an ongoing weakening of the yen has helped boost Japan’s shipments to key markets.

It also said key indicators including business investment and consumer demand were looking brighter. The yen was virtually unchanged after the announcement sitting at 99.71 to the dollar. The unit has lost about a fifth of its value against the greenback since Abe set out his monetary-driven policy at the start of the year.

Abe’s hand-picked bank management team, led by governor Haruhiko Kuroda, was installed six months ago with a mission to join forces with government to reverse Japan’s fortunes.

The bank unleashed its massive bond-buying scheme in April, similar to the Fed’s quantitative easing programme, and set a target of hitting two-per cent inflation within two years. — AFP