RIYADH (Reuters) – Bank of Japan Governor Haruhiko Kuroda said on Saturday the yen’s recent declines were largely driven by a strong dollar, shrugging off some market views that the widening coronavirus epidemic is triggering an outflow of funds from Asia.
Kuroda also said he had not changed his view that Japan’s economy would continue to recover moderately, suggesting that he saw no immediate need for the BOJ to expand stimulus.
“If needed, we will take additional monetary easing steps without hesitation,” he told reporters upon arriving at a Group of 20 finance leaders’ gathering in Riyadh.
“But the situation is still uncertain. I don’t think our scenario projecting a moderate economic recovery has been derailed.”
The fallout from the coronavirus crisis has overshadowed the meeting of the world’s top economies kicking off on Saturday. Business disruptions in China are starting to spill over into the global economy, with parts shortages rippling through supply chains as far away as the United States.
The yen bounced back on Friday after suffering its worst two-day performance since 2017 on worries about the health of Japan’s economy, which has been hit by supply-chain disruptions and a plunge in Chinese tourists caused by the virus outbreak.
Kuroda dismissed views held by some market players that the yen could be losing its status as a safe-haven currency.
“When you look at recent developments, the dollar is strengthening against the yen, the euro and various currencies including those in Asia,” Kuroda said.
“It’s true there is uncertainty over the coronavirus outbreak’s impact on the Chinese, Asian and global economies. But I don’t think there has been a fundamental change in the exchange-rate market.”
UPBEAT ON OUTLOOK
Japan’s economy shrank at its fastest pace in nearly six years in the December quarter, as soft global demand for Japanese cars and machinery and last year’s sales tax hike hurt domestic consumption and business spending.
Some analysts expect the economy to contract again in the current quarter, dashing the BOJ’s hope that an expected rebound in global growth in the middle of the year will underpin Japan’s fragile recovery.
Kuroda brushed aside voices of pessimism, saying that corporate capital expenditure remained firm and rising household income was underpinning domestic consumption of an array of goods and services.
Temporary factors that led to the October-December economic contraction, such as damage from a string of typhoons and the sales tax hike, will fade later this year, he said.
While the coronavirus outbreak was a fresh risk, other uncertainties that dragged on growth like the Sino-U.S. trade tensions and Brexit were subsiding, Kuroda added.
“I don’t expect Japan’s economy to suffer a severe downturn,” he said.
Under a policy dubbed yield curve control, the BOJ caps long-term borrowing costs around zero to spur growth and achieve its elusive 2% inflation target.
Many BOJ policymakers are wary of ramping up stimulus unless the economy is hit by a severe shock due to their dwindling ammunition and the rising cost of prolonged easing such as the hit to commercial banks’ profits from ultra-low interest rates.
(Reporting by Leika Kihara; Writing by Saeed Azhar; Editing by Pravin Char)
OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.
However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.
The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.
Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.
The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.
The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.
This report by The Canadian Press was first published Oct. 17, 2024.
OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.
In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.
The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.
Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.
In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.
It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.
This report by The Canadian Press was first published Oct 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales in August fell to their lowest level since January 2022 as sales in the primary metal and petroleum and coal product subsectors fell.
The agency says manufacturing sales fell 1.3 per cent to $69.4 billion in August, after rising 1.1 per cent in July.
The drop came as sales in the primary metal subsector dropped 6.4 per cent to $5.3 billion in August, on lower prices and lower volumes.
Sales in the petroleum and coal product subsector fell 3.7 per cent to $7.8 billion in August on lower prices.
Meanwhile, sales of aerospace products and parts rose 7.3 per cent to $2.7 billion in August and wood product sales increased 3.8 per cent to $3.1 billion.
Overall manufacturing sales in constant dollars fell 0.8 per cent in August.
This report by The Canadian Press was first published Oct. 16, 2024.
