9 April 2001, 10:09 BoJ's Hayami sees sustained sluggish economic performance
TOKYO (AFX-ASIA) - Bank of Japan governor Masaru Hayami said the
Japanese economy is expected to continue its sluggish tone for the time
being, adding that downward pressure on prices will continue.
"The recovery in Japan's economy has been pausing, reflecting a
decrease in exports," Hayami said in a opening speech at a quarterly
branch managers' meeting.
"Looking ahead, the possibility is high that the economy will
likely remain stagnant for sometime."
Hayami also said that as the future economic developments become
uncertain, "possibilities that weak demand will intensify downward
pressures on prices warrant careful monitoring."
Hayami also asked financial institutions to step up their efforts
in disposing non-performing loans.
Hayami said that to make best use of the latest monetary easing and
to achieve sustainable growth in Japan, "progress in structural
reforms... namely resolution of the bad debt problem, is
indispensable."
The BoJ governor said that while financial institutions managed to
strengthen their financial standing due to their own efforts and public
fund injections, "many challenges remain unaddressed" before the full
resolution of the bad debt problem.
Hayami said banks' financial profiles, particularly those of large
banks, remain fragile in the face of share price fluctuations.
Hayami said he rates highly the economic stimulus package released
by the government last Friday, especially the various measures to
support structural reforms.
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