The Bank of Japan on Tuesday lowered its real GDP growth forecast for this fiscal year, citing a sharp contraction in production in the immediate aftermath of the March 11 earthquake and tsunami.
The BoJ cut its growth forecast for the year ending March 2012 to 0.4 per cent from an earlier 0.6 per cent due to the record earthquake and a tsunami that devastated the northeast coast and sparked a nuclear crisis.
While the central bank upgraded its general view of the economy, saying it is 'picking up' as post-quake supply-side constraints ease, it said growth prospects would be lower than earlier thought for the fiscal year ending March 2012.
It added that earlier projections for 2.9 per cent growth in the year starting April 1, 2012 remain unchanged amid expectations Japan's economy will return to 'a moderate recovery path from the second half of fiscal 2011.'
The board also voted unanimously for the key interest rate to remain unchanged at between zero and 0.1 per cent.
In the aftermath of the earthquake, the BoJ injected a record amount of cash into the banking system and doubled an asset purchase fund to 10 trillion yen ($125 billion), a key policy tool it kept unchanged Tuesday.
Source : New Age
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