Governor Masaaki Shirakawa warned in a speech yesterday that though “major turmoil has been avoided following the outcome of the Greek election…Greece is pressed to implement fiscal and structural reform while the economy slumps sharply.”
With “close attention” on Europe’s uncertain future, the committee refrained from increasing its asset programme, but some members stressed that it should “stand ready to take appropriate actions”.
The small shortfall, of just over ¥11bn (just under £90m), stems from revitalised Japanese consumption and a strong yen, combined with “sluggish” EU demand, and came despite increased Japanese exports.
In the minutes of the most recent BOJ meeting, the conflicting goals of short-term economic growth and medium- to long-term fiscal consolidation are given as reasons for European demand stagnation.
Barclays Research expects Japanese “exports will continue to increase” but also that “imports will increase due not only to demand for energy, but also to support the post-earthquake reconstruction”.