Risk Increases for Prolonged World Slowdown - Bank of Japan Report
The odds of an extended world economic slowdown have increased and the Bank of Japan (8301) needs to remain ready to take decisive action if necessary, board member Ryuzo Miyao said.
“The risk that the global economic slowdown will be prolonged is increasing slightly,” Miyao said in a speech in Shimonoseki, southwestern Japan today. For Japan, excessive strength in the yen may weigh on exports, profits and stock prices, Miyao said.
Australia today reported slower growth in the second quarter, after a U.S. report yesterday showed manufacturing contracted in August in the world’s biggest economy. Japan’s central bank may add to monetary easing by October at the latest and a move this month is possible as exports and output weaken, according to Citigroup Inc.
Businesses around the world have become more cautious as Europe’s debt crisis persists, Miyao said. The pace of a U.S. recovery is slowing, while a rebound in China and other Asian developing nations may be delayed until after the autumn, the official said.
Japan stocks declined a fifth day, headed for the longest losing streak in two months. The Nikkei 225 (NKY) Stock Average was down 0.7 percent to 8,712.15 as of 12:39 p.m. in Tokyo. The yen was at 78.44 per dollar, about 4 percent from its postwar high, underscoring the threat to exporters of a strong currency.
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