BOJ Upgrades Japan Economic Outlook, Says Output To Recover (iMarketNews)

Wednesday, January 26, 2011 - 00:26

TOKYO (MNI) - The Bank of Japan on Wednesday upgraded its economic outlook, indicating that the current pause in growth that began in the October-December quarter will be temporary and that the economy should return to a recovery track in the coming months.

"Japan's economy is expected to gradually overcome the deceleration in the pace of improvement and return to a moderate recovery path as the growth rate of the global economy is likely to start increasing again led by emerging and commodity-exporting economies," the BOJ said in its monthly report for January.

In December, the BOJ said, "Japan's economy is likely to grow at a slower pace for some time, but is expected to return to a moderate recovery path thereafter."

The BOJ also upgraded its assessment of industrial production from the previous month.

It said that "with firms' persistent sense of excessive capital stock, the pace of improvement in business fixed investment is likely to remain moderate. In these circumstances, production is expected to resume a moderate increasing trend."

In December, the BOJ said, "production has recently declined slightly."

Meanwhile, the BOJ maintained its assessment of the current economic climate, repeating, "Japan's economy still shows signs of a moderate recovery, but the recovery seems to be pausing."

The bank said exports "have been somewhat weak," which was a downgrade from its December statement that exports "have been more or less flat."

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