The Bank of Japan raised its growth forecast as it left interest rates unchanged on Thursday. AFP/CNA reports:
Japan's central bank kept its key lending rate unchanged at 0.1 per cent on Thursday, as widely expected, and raised its growth forecast for the current fiscal year to 2.6 per cent.
"Japan's economy shows further signs of moderate recovery," the Bank of Japan said in a statement, adding however that overcoming deflation and returning to sustainable growth remained a "critical challenge".
Elsewhere, though, the story on Thursday was mostly about slowing economic growth.
AFP/CNA reports slower growth in China.
China said Thursday its economic growth slowed in the second quarter, as massive stimulus spending was scaled back and moves to rein in soaring property prices started to bite.
Gross domestic product in the world's third-largest economy maintained double-digit growth for the third quarter in a row, expanding 10.3 per cent in the three months to June, according to the National Bureau of Statistics.
But the figure marked a slowdown from the blistering 11.9 per cent growth in the first quarter and the 10.7 per cent in the last three months of 2009, after Beijing introduced a range of measures to avert economic overheating...
The nation's closely watched consumer price index, the main gauge of inflation, rose 2.9 per cent on year in June alone, compared with 3.1 per cent in the previous month, the statistics bureau said.
It was a similar picture in the US, with initial jobless claims falling last week but manufacturing contracting last month. Reuters reports:
Initial claims for state unemployment benefits dropped 29,000 to 429,000 last week, the lowest level in 23 months, as seasonal layoffs at factories eased, the Labor Department said. That was well below market expectations for a fall to 450,000.
In a second report, the department said producer prices fell 0.5 percent last month as gasoline prices dropped and food costs recorded their largest decline since April 2002....
The relatively good news on employment was overshadowed by a Federal Reserve report showing industrial production rose 0.1 percent last month, braking sharply from May's 1.3 percent advance. Manufacturing output declined 0.4 percent, snapping a three-month streak of gains.
That weakness probably persisted this month, with measures of factory activity in New York state and the mid-Atlantic region slowing sharply from June. Growth in New York state was the slowest in seven months, while expansion in the mid-Atlantic region retreated to levels last seen in August.