Yesterday, we had a new Bank of Japan governor but no change in interest rates as he acknowledged a slowing Japanese economy. Bloomberg reports:
The Bank of Japan's new Governor Masaaki Shirakawa said growth will keep slowing as rising oil and commodity prices weigh on the world's second-largest economy.
"Higher energy and raw-materials costs are causing the economy to slow now," Shirakawa, 58, told reporters in Tokyo today after the bank cut its economic assessment for the first time in four months and kept the key interest rate at 0.5 percent. "The mechanism of production, income and spending is weakening, but it's not as if it's fallen apart."
Reports earlier in the week had not been too bad, though. On Monday, Bloomberg had reported:
The leading index, derived from 12 indicators including housing starts and stock prices, rose to 50 percent in February, matching the threshold that signals growth will continue over the next two quarters, the Cabinet Office said today in Tokyo. The index has been below 50 in eight of the past 12 months.
Japan will probably weather the U.S. slowdown and keep expanding through 2009, the Organization for Economic Development and Cooperation said today. Exports to Asia have helped the economy maintain its footing amid financial-market turmoil and the worst U.S. housing recession in a generation...
The world's second-largest economy will expand 1.6 percent this year, the OECD said, keeping its forecast unchanged from December. Japan grew 2.1 percent last year.
On Tuesday, Bloomberg reported:
The Economy Watchers index, a survey of barbers, taxi drivers and others who deal with consumers, rose to 36.9 from 33.6 in February, the Cabinet Office said today in Tokyo. The outlook index of conditions in two to three months fell to 38.2.
There were more positive reports from Bloomberg today. For example, the current account surplus widened in February.
The surplus expanded 2.9 percent to 2.47 trillion yen ($24 billion) from a year earlier, the Ministry of Finance said in Tokyo today. The median estimate of 24 economists surveyed by Bloomberg News was for the gap to increase to 2.47 trillion yen...
Export rose 9 percent in February from a year earlier, accelerating from 8.4 percent in January, today's report showed. Imports increased 12.5 percent, compared with a 9.1 percent gain in January.
Loan growth accelerated in March.
Japan's bank lending accelerated for the third straight month in March as companies borrowed more to pay for higher-priced raw materials and as spreads on corporate bonds rose, making bank loans more attractive.
Loans excluding trusts rose 1.2 percent from a year earlier, the most since February 2007, after growing 0.9 percent in February, the Bank of Japan said today. Bank lending has climbed for 26 months, peaking in July 2006 when the Bank of Japan ended a policy of keeping interest rates near zero.
But machinery orders fell in February.
Japanese machine orders fell in February as companies scaled back investment plans on concern a U.S. recession may hurt overseas sales.
Equipment orders, which signal capital spending in the next three to six months, declined 12.7 percent from January when they climbed 19.6 percent, the Cabinet Office said today in Tokyo. The median estimate of 30 economists surveyed by Bloomberg News was for a 14 percent drop.