Bank of Japan officials fear a delay in the country’s recovery

FILE PHOTO;  A security guard walks past the Bank of Japan headquarters in Tokyo

© Reuters / Issei Kato
FILE PHOTO; A security guard walks past the Bank of Japan headquarters in Tokyo

Por Leika Kihara

TOKYO, Sep 28 (Reuters) – Some Bank of Japan policy makers warned of the risk of delaying the country’s economic recovery as state of emergency restrictions to combat the coronavirus pandemic weigh on consumption, minutes from their July meeting showed Tuesday.

Although the nine board members agreed that strong exports and capital spending would underpin growth, some also called for greater vigilance against risks from abroad, such as the consequences of a possible slowdown in the Chinese economy, according to reports. proceedings.

“A few members said the timing of a full recovery in the Japanese economy is likely to be delayed a bit” compared to their April projections, according to the minutes.

“Many members said that the economic outlook abroad was very uncertain with various risks,” the minutes showed, citing one member who said the possibility of China’s economy slowing “should be taken into account.”

“If the rise in long-term interest rates in the United States accelerates, we must be aware of the risk of capital outflows from emerging economies,” another member was quoted as saying.

These observations highlight the concern of those responsible for monetary policy about the fragile state of the recovery in Japan, although they maintain the opinion that the third largest economy in the world is heading for a moderate rebound after the stagnation caused by last year’s pandemic. .

At the meeting of July 15 and 16, the Bank of Japan did not modify its monetary strategy, but cut its growth forecast for this year compared to the one presented in April, since the restrictions of the state of emergency to combat the pandemic affected to consumption.

(Reporting by Leika Kihara; edited by Kim Coghill and Lincoln Feast; translated by Tomás Cobos)

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