Findlay Nicolson: Weakening exports could affect Japan’s economic recovery as trade tensions remain unresolved.
Findlay Nicolson analysts say that for the time being, Japan’s robust domestic demand has been able to offset a degree of the weakness seen in exports as a result of the trade war but a recent report by the BoJ revealed that a growing number of businesses are feeling greater concern over the outcome of the trade war and the current global economic slowdown.
The BoJ has promised to maintain monetary stimulus for as long as is needed to help the economy reach its targeted rate of 2% inflation, even pledging to increase stimulus if need be.
But Findlay Nicolson analysts say that growth will likely slow in the coming months as exports will be further weakened by unresolved US-China trade tensions, Japan may not have the necessary resources to provide stimulus required to boost the economy.
Years of easing have reduced interest rates to zero. Commercial financial institutions have minimal profit margins and Findlay Nicolson analysts say the central bank is lacking sufficient room to maneuver should the Japanese economy fall into another recession.
Published at Fri, 19 Jul 2019 07:00:00 +0000