The Bank of Japan kept interest rates on hold on Thursday and signalled it would be cautious about raising them in the near future, as Toshihiko Fukui, BoJ governor, said financial market turmoil linked to US subprime loans would take time to subside.
The recent market turmoil had also pushed up the yen. That could have an adverse impact on exports.
As it is, the Finance Ministry had reported on Wednesday that Japan's trade surplus narrowed in July. From Bloomberg:
The surplus shrank 21.1 percent in July from a year earlier to 671.2 billion yen ($5.9 billion), the first drop since January, the Finance Ministry said in Tokyo...
Exports rose 11.7 percent to 7.06 trillion yen last month, less than the 13 percent expected by economists and 16 percent in June...
Imports climbed 16.9 percent to a record 6.39 trillion yen, as a weaker yen in July drove energy costs higher...
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