This from the Bank of Japan, in spite of recent QE programme and a cut that takes the bank rate effectively to zero. More worrying still is the reasoning behind forecasts of increased export growth:
Japan’s economy is likely to grow at a slower pace for some time, but is expected to return to a moderate recovery path thereafter… Exports are likely to be more or less flat for the time being, but they are expected to increase moderately again, reflecting the improvement in overseas economic conditions.
Japan’s top three trading partners – by a long way – are China, the US and the EU. Though demand for Japanese goods is growing in the EU, it is growing at a slower pace in the US, “marginally” in China, and flat elsewhere in east Asia.
The BoJ’s monthly report makes for sober reading for monetary economists because the recent easing measures have worked, but they haven’t helped. “Financial conditions have continued to show signs of easing” and interest rates, already near zero, have fallen further; lending attitudes are “improving“. But bank lending is still down, year-on-year, and the real economy is far from stimulated.
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