manufacturers

The Bank of Japan is set to increase its growth forecast to above 2 per cent, unnamed sources have told Reuters. The Bank’s forecast is currently 1.8 per cent for the fiscal year, and the next rate setting meeting is July 14-15.

The Bank would be playing catch-up with the government, if it does revise its forecast up. The finance ministry changed its growth forecast from 1.4 to 2.6 per cent last month. Private economists have apparently settled on a figure close to 2.4 per cent. Uncertainty about the economic recovery is likely to temper the Bank’s optimism, which was fuelled yesterday by a better-than-expected manufacturers’ confidence survey. 

Ralph Atkins

The eurozone’s economic growth spurt is showing fresh signs of losing momentum with a closely-watched survey flashing warnings of a slowdown ahead. June’s purchasing managers’ indices for the 16-country region indicated that the brisk pace of export-led economic expansion seen in the second quarter of this year marked a peak in the upswing.

The latest readings could heighten worries of a lacklustre eurozone economy being hit increasingly by recessionary conditions in southern Europe, as well as fiscal austerity measures and weaknesses in banking systems across the continent.