Japan says weak demand will dent exports

Japan port Japan's central bank is confident domestic demand will boost growth

Related Stories

The Bank of Japan (BoJ) says the country's exports have levelled off recently, a reversal of the recovery the central bank saw in February.

The BoJ cited disappointing external demand for the change of assessment.

However, the central bank is confident of economic expansion at home to help maintain its growth momentum.

Companies are pouring more money into their businesses, and factory activities are rising at a slightly faster pace.

Recent data showed industrial production had risen by 4% in January, which indicated an increase in factory activities for the second month in a row.

April tax

But there are concerns that domestic demand and consumer spending will slow down from next month.

On 1 April the government will increase the country's sales tax to 8% from the current 5% in order to pay for rising welfare costs.

The assessment on exports, as well as confidence on domestic growth, comes from the end of the central bank's monthly meeting on monetary policies.

Also at the meeting, the central bank maintained its pledge to expand the monetary base by 60 trillion yen ($590bn; £354bn) to 70 trillion yen per year.

The central bank's latest meeting took place as the country marks the third anniversary of the Fukushima nuclear disaster.

Japan now imports more than 90% of its energy from overseas and the weak Japanese yen means the country has high energy costs, which has led to a continued widening of its trade deficit.

More on This Story

Related Stories

More Business stories

RSS

Features

From BBC Capital

Programmes

  • Cattle herded in AustraliaThe Travel Show Watch

    The spectacle of herding 2,000 cattle using bikes, cars and a helicopter

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.