News & Reports News Year 2011 April , 2011 Japanese Economy BOJ Shirakawa says hopes Japan economy rebounds in Q3

Japanese Economy BOJ Shirakawa says hopes Japan economy rebounds in Q3


Bank of Japan Governor Masaaki Shirakawa expressed hope that the country's economic growth will turn positive in the third quarter of this year as supply constraints ease.

Shirakawa also reiterated that the central bank underwriting government bonds, proposed by some politicians to finance reconstruction efforts, was undesirable. Business and household sentiment are deteriorating due to the earthquake, tsunami and nuclear crisis that struck northeast Japan last month, Shirakawa said, adding that power shortages triggered by the devastating earthquake and subsequent supply constraints would ease after the summer.

""It would be tough for output to rebound in one or two months,"" as was the case after the 1995 Kobe earthquake, Shirakawa said in an interview on public broadcaster NHK. ""But supply constraints will ease over time and reconstruction demand will certainly emerge,"" he said. ""We need to monitor developments without any preset ideas, particularly when there is so much uncertainty.

"" Shirakawa did not comment on monetary policy or on the BOJ's twice-yearly economic and price outlook report set for release after its rate review on Thursday. The BOJ is expected to stand pat on monetary policy on Thursday. It is also expected to sharply cut its economic forecast for the current fiscal year but project a rebound in the autumn, signaling that it has eased monetary policy enough to keep the economy afloat at least for now.