RTTNews - Wednesday, Bank of Japan's policy board member Hidetoshi Kamezaki said the central bank should implement policies proactively and swiftly depending on changes in economic conditions.
He told business leaders in Shizuoka that the economy was going down a steep hill. But the policymaker sees recovery in the near term due to the effect of stimulus measures and easing pace of production declines. He said the worlds' second largest economy would gradually recover towards the latter half of the current fiscal year.
It will take significant time for output and sales to fully recover, Kamezaki said. He added that the Japanese economy could start falling again if recovery in overseas are weak and fails to support exports. He sees further deterioration in jobs and personal income, which would lead to a weakness in household spending.
The BoJ rate-setter said the situation has not reached a point where it can stop the unconventional measures. Financial market stability needs to be restored before ending extraordinary policy steps. Further, he assessed that financial markets are stable than before but root causes of the financial crisis are to be solved.
Regarding the consumer price outlook, Kamezaki said consumer prices would fall, possibly around 2% by the summer and bring down inflationary expectations.
Earlier, BoJ Governor Masaaki Shirakawa said economic recovery in Japan and the rest of the world would be mild as removing excesses accumulated over the past several years will take considerable time.
Last month, the central bank had raised its economic assessment. The central bank said the pace of deterioration in Japan's economic conditions is likely to moderate gradually, leading to a leveling out of the economy.
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