TOKYO (MNI) – Japanese Economic and Fiscal Policy Minister Kaoru
Yosano said on Wednesday that the government and the Bank of Japan share
the assessment that the economy is showing signs of recovering from the
recent sharp downturn triggered by the March 11 earthquake disaster.

Yosano told reporters that the BOJ’s latest view is “more or less
in line with” the government’s own assessment of the current economic
climate.

Economic ministers and BOJ Governor Masaaki Shirakawa attended a
meeting earlier today to discuss how the economy is doing three months
after the massive quake and tsunami wrecked Japan’s northeastern Pacific
coast, damaging production facilities and disrupting supply chains for
automobiles and electronics.

Yosano quoted Shirakawa as saying that concerns about power supply
shortages this summer and Japan’s high public debt are two major
downside risks to a sustained economic recovery.

After a two-day policy meeting, the BOJ board on Tuesday upgraded
its view slightly on improving business and household sentiment, saying
“Japan’s economy continues to face downward pressure, mainly to the
production side due to the effects of the earthquake disaster, but is
showing signs of picking up.”

In the past month there has been an “upside surprise” to the pace
of a recovery in production facilities, supply chains and backup plans
to cope with power shortages during the peak usage time this summer,
Shirakawa told reporters on Tuesday.

The government will present its own assessment in its monthly
economic report for June due next Monday.

Yosano said there is “no major gap” between the government’s
economic growth outlook and forecasts by private-sector economists,
suggesting that the government will sharply revise down its official
projection provided last December that Japan’s GDP will grow 1.5% in
fiscal 2011.

The average GDP forecast by 22 research institutes is for no growth
in the current fiscal year, according to the Cabinet Office.

The government plans to announce its latest forecast for growth and
inflation next month.

tokyo@marketnews.com
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