23/04 BOJ to lower economic growth outlook due to quake

2011/04/23

The Bank of Japan will likely lower its outlook for Japan's economic growth in fiscal 2011 because a temporary slowdown appears inevitable following the Great East Japan Earthquake.

The BOJ's current projection for real GDP growth is 1.6 percent year on year. But the dominant view within the central bank is that the damage caused by the devastating earthquake and tsunami will take a toll on production, consumer spending and exports.

The revised projected growth, which will still remain in positive territory, is expected to appear in the BOJ's Outlook for Economic Activity and Prices (Outlook Report) to be endorsed at a monetary policy meeting on April 28.

The central bank releases projections for real gross domestic product and the consumer price index (excluding perishable food items) in its biannual reports released in April and October.

The BOJ is expected to revise upward its outlook for CPI to reflect soaring oil prices.

The projected growth rate for real GDP in fiscal 2012 will likely be raised from the current 2.0 percent on expectations a recovery will start in the second half of 2011.

Following the March 11 earthquake, the BOJ has further eased its monetary policy and taken other measures to help the economy.

No additional easing is expected on April 28 because a majority of opinions recommend verifying the impact of the earlier measures.

13/04 BOJ report notes massive damage to local economies

2011/04/13

Chiefs of the Bank of Japan's local branches discuss the economic situations in their jurisdictions at a meeting held in Tokyo. (Toru Hatanaka)

The Bank of Japan painted a gloomier picture of local economies in much of the nation in a report released Monday, citing widespread and significant economic damage caused by the March 11 earthquake and tsunami.

In its Regional Economic Report, or the Sakura Report, for April, the central bank revised down its assessment for economic conditions in seven of the nine regions.

As for the Tohoku region, whose coastal areas were devastated by the Great East Japan Earthquake, the BOJ report, the bank's first economic diagnosis since the disaster, said its local economy had been "damaged significantly."

The economic situation in the neighboring Kanto-Koshinetsu region, which includes the Tokyo metropolitan area, is "severe," according to the quarterly report.

The BOJ kept its economic assessment for Kinki unchanged from the evaluations in the previous report released in January. But it revised its assessment upward for the Shikoku region.

At the central bank's quarterly meeting of local branch chiefs that compiled the report, BOJ Governor Masaaki Shirakawa pointed to "strong downward pressure" on the nation's economy, especially in terms of production. Shirakawa's remarks reflected the central bank's fear that disrupted production could cause the nation's economic health to deteriorate.

In its previous Sakura Report in January, the bank said the economy in the Tohoku region was "picking up as a whole." Referring to the assessment that the Tohoku region's economy had been "damaged significantly," a BOJ official said the bank used an unusually strong expression to acknowledge the dire economic situation there.

At a Monday news conference, Kazuo Fukuda, general manager of the BOJ's Sendai Branch, said, in the Tohoku region's coastal areas, "Houses, factories, roads and all other facilities have been lost. Many elements of the region's production and sales infrastructure have disappeared."

"Even companies that have the will to rebuild their operations can't see how they can do it," he added.

All over the Tohoku region, an acute gasoline shortage is making it difficult for consumers to go shopping, crimping consumer spending, according to the report. The disaster has also delivered a heavy blow to the region's tourist industry.

Local financial institutions have also suffered major damage. Of the 936 branches of banks and other financial institutions in the region, 128 were forced to stop operations, at least temporarily. Only 59 have resumed operations, with many operating in makeshift facilities.

As one bright spot in the otherwise dismal economic picture of the region, the report pointed to the "fast pace" at which recovery work is progressing in inland areas.

There are more manufacturing facilities and distribution hubs inland than in coastal areas of the region. The BOJ predicts production and distribution in inland areas will recover from the damage, sooner or later.

The economic repercussions from the calamity are also being felt in other parts of the nation.

In the Kanto-Koshinetsu region, part of its coastal areas has been battered much like those in the Tohoku region. In addition, "cautious consumer sentiment" that has spread since the disaster is also dragging down the economy, the report said.

"Supply chain disruptions" are the main factor behind the central bank's downgrading of its economic assessments for so many regions, including those that have not been directly damaged by the quake and tsunami. Hardest hit is the auto industry.

In the central Tokai region, where Toyota Motor Corp. is headquartered, industrial output, especially in the auto manufacturing sector, appears to be falling sharply, the report said.

Difficulty in purchasing auto parts is also causing sharp drops in capacity utilization rates at car manufacturing plants in the Chugoku and Kyushu-Okinawa regions, according to the report.

The effects of the disaster are also dampening employment. Due to production cuts forced by the quake, some nonregular workers in the Kanto-Koshinetsu region have been involuntarily furloughed, the report pointed out.

Discussing the economic outlook for the coming months in his speech at the Monday branch manager meeting, Shirakawa reiterated that the economy will return to a path of moderate recovery as production starts picking up.

But it seems to be too early to make an accurate estimate of the range and magnitude of the effects the disaster will have on the economy.

(This article was written by Toru Hatanaka and Takashi Kamiguri.)

23/03 日銀、２３日も２兆円供給 総額９４兆５１００億円に

2011年3月23日9時43分

.　日本銀行は２３日午前９時半過ぎ、銀行や証券会社などが必要な資金をやりとりする短期金融市場に２兆円の資金を供給する公開市場操作（オペ）を実施した。２５日に金融機関に貸し出す分。日銀による大量資金供給は１４日から連休を挟んで７営業日連続。これで日銀による資金供給総額は９４兆５１００億円になる。

14/03 日銀、過去最大１０兆円の資金供給

　日本銀行は１４日の金融政策決定会合で、東日本巨大地震で経済の先行き懸念が高まっているとして、追加金融緩和に踏み切る方向で検討に入った。

　また、日銀は同日、市場が必要な資金を十分に確保できるように、金融機関に対し短期金融市場で過去最大となる約１０兆円の資金を供給すると発表した。経済・市場の混乱防止に万全を期す姿勢を明確にする。決定会合は予定より１時間早い正午から始まった。追加金融緩和は、昨年１０月に決めた包括緩和策の一環として設置した基金（５兆円）を大幅に増やす案を検討し、国債などの買い入れ額を増やすとみられる。

（2011年3月14日14時30分 読売新聞）