BOJ warns Japan exports to stay flat

TOKYO - Reuters

A pedestrian walks past Bank of Japan headquarters in Tokyo. REUTERS photo

Japanese exports and output will likely be flat for the time being before resuming a moderate increase, with the outlook highly uncertain due to slowing global growth and the pain from a strong yen, the Central Bank (BOJ) said on Thursday.

Severe flooding in Thailand will also affect Japan’s exports significantly in the final quarter of this year as it disrupts supply chains across Asia, the BOJ said in its monthly report for November.

“Exports and output are expected to be more or less flat for the time being and increase moderately thereafter, mainly reflecting a pickup in the pace of recovery in overseas economies,” the central bank said, although it warned that the outlook remained uncertain.

“The slowdown in overseas economies will continue for the time being, while the yen’s rise will weigh on exports to some extent,” the central bank said.

That was a bleaker assessment than in the previous month’s report, which said exports and output would continue to rise as overseas growth stayed firm.

Market turmoil from Europe’s sovereign debt woes, balance sheet problems in the United States and tighter monetary policy in emerging economies were slowing global growth, the BOJ said. The latter kept monetary policy steady in a review that ended on Nov. 16 but cut its economic assessment and warned that Europe’s debt problems could weigh on global growth