The Bank of Japan refrained from announcing any new policy steps today. Since cutting the key rate in December, the bank has been buying corporate debt and stocks to channel cash to companies struggling to raise funds amid the recession. It has also increased its monthly purchases of government bonds to 1.8 trillion yen.
The Bank of Japan said the world’s second-largest economy will resume growing in 2010 after shrinking 3.1 percent this fiscal year. Gross domestic product will expand 1.2 percent in the year starting April 2010, compared with its January estimate of a 1.5 percent gain, the central bank said in its semiannual outlook today in Tokyo. The current fiscal year’s contraction will be steeper than the 2 percent predicted three months ago.
Japan has been pummeled by a collapse in exports since last September, yet signs are emerging that the worst of the recession may be over. Factory production rose for the first time in six months in March and companies plan to increase output again in April and May as they replenish inventories, a report showed today.
Prime Minister Taro Aso this month unveiled a record 15.4 trillion yen ($158 billion) stimulus package to support the economy amid faltering overseas demand. The plan prompted Nomura Securities Co., Morgan Stanley and Nikko Citigroup Ltd. to raise their GDP forecasts for the current fiscal year, while adding that the measures would only provide a temporary boost as companies reduce costs.