October 22, 2009
Members of the Bank of Japan (BOJ) expressed hesitation that the global economic recovery could maintain its momentum, according to minutes from BOJ's September policy meeting released on Monday.
"Many members ... said that the pace and sustainability of overseas economic recovery -- after inventory adjustments had been completed and the initial effects of the policy measures had abated -- remained highly uncertain," the minutes said.
At the September meeting, the bank decided to keep stimulus measures to combat the global downturn in place.
On Wednesday, at the October Bank of Japan policy meeting, members also decided to keep these measures in place, demonstrating the central bank's cautious view of current data, which shows the economic downturn seems to be abating.
At the September meeting some members also raised concerns that current conditions could quickly be reversed, keeping economies from returning to vibrancy.
"Some members ... expressed the view that lingering balance-sheet adjustments of firms, households, and financial institutions were likely to prevent the world economy from achieving an early and full-fledged recovery, and risks to the outlook were still tilted to the downside."
At the meeting members were particularly positive on the condition of the Chinese and Indian economies. "The Chinese economy had continued to grow at a relatively rapid pace, led mainly by domestic demand," the minutes said. "The Indian economy ... also continued to grow at a relatively rapid pace."
On Japan's domestic economy, the bank said it did not expect an economic recovery to reach households anytime soon.
"The employment and income situation had become increasingly severe, with the substantial slackening of the labor market and the significant decrease in household income. Household income was likely to continue decreasing substantially for the time being, mainly due to the lagged effects of the earlier drop in corporate profits and production," the minutes said.
The Bank of Japan's monthly monetary policy meeting is held in Tokyo to decide the best ways for Japan to maintain price stability and keep markets and the economy from changing dramatically.