TOKYO (MNI) – Economic and Fiscal Policy Minister Motohisa Furukawa
said on Thursday that Japan’s economy is expected to continue picking up
in the second half of the year onward, backed by demand for rebuilding
quake-hit northern regions.
But he also told Market News International and other news media
that the government will keep a close watch on downward risks to a
sustained economic recovery.
Japan is faced with the dampening effects of the yen’s rise to
record high levels, uncertainty about global growth, power supply
constraints as well as the risk of the hollowing out of industry, he
said.
The recent foreign exchange rates for the yen are “significantly
higher than the rates assumed by Japanese companies,” Furukawa said.
The strong yen will squeeze exporter profits and may prompt firms
to shift their production capacity overseas further, he warned.
“I expect the Bank of Japan to support the economy from the
financial side in an appropriate and bold manner,” he said, without
elaborating.
The minister repeated the government’s recent assessment that Japan
is in “mild deflation.”
Asked about selling state-owned assets as a way of scaling back
proposed Y13 trillion tax hikes for funding the reconstruction of
disaster-hit regions, Furukawa replied, “It is necessary to discuss all
possible options.”
tokyo@marketnews.com
** Market News International Tokyo Newsroom: 81-3-5403-4833 **
[TOPICS: M$J$$$,M$A$$$,MGJ$$$]
