Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Weak Japan Exports, Output Said to Raise Concerns at BOJ

Bank of Japan officials are concerned about increasing signs of weakness in the economy following a sales-tax increase, according to people familiar with the central bank’s discussions.

Governor Haruhiko Kuroda and his board will discuss this week if they should lower their assessment of the nation’s exports and also whether to express caution about a decline in industrial production, said the people, who asked not to be identified because the talks are private.

Economists from JPMorgan Chase & Co. and UBS AG cut their estimates for second-quarter gross domestic product after data showed exports unexpectedly declined, retail sales dropped more than forecast and output fell the most since the March 2011 earthquake. The BOJ is forecast to maintain its record stimulus at a two-day meeting ending Aug. 8.

“The latest data flow out of Japan has not been pretty,” Izumi Devalier, Japan economist at HSBC Holdings Plc in Hong Kong, wrote in an e-mailed note yesterday. “We think the government and central bank will face increasing pressure over the coming weeks to deliver additional stimulus if data continues to disappoint.”

Prime Minister Shinzo Abe increased the sales levy by 3 percentage points in April, hitting consumer spending and ending six straight quarters of growth in the world’s third-biggest economy. Industrial production tumbled 3.3 percent in June from the previous month, the steepest decline in more than three years, as manufacturers cut back in response to weak consumption.

Government Assessment

The volley of weak data overshadowed a July 17 report from Abe’s Cabinet Office in which the government raised its assessment of the economy for the first time in six months, saying a drop in demand after sales-tax increase was easing.

“We are finally seeing the real impact of the sales tax,” said Maiko Noguchi, senior economist at Daiwa Securities Co. in Tokyo and a former central bank official. “The rebound from the tax hike is going to be anemic.”

The BOJ will keep policy unchanged at its meeting this week, according to all 34 economists in a survey by Bloomberg News. Twenty-six percent of those surveyed forecast easing to come at one of two meetings in October.

Japanese companies have found little extra support from overseas demand, with shipments stagnating, even after reflationary policies championed by Abe helped to weaken the yen 17 percent against the dollar since he took power in December 2012. The currency was little changed at 102.58 per dollar at 11:43 a.m. in Tokyo.

Export Drop

Exports dropped 1.1 percent in three months through June from the previous quarter, when they declined 1 percent, according to the Bank of Japan.

Reuters reported earlier that BOJ policy makers may propose lowering their view of exports and industrial output.

After the production data on July 30, JPMorgan cut its GDP forecast to an annualized contraction of 7.5 percent for the second quarter and UBS reduced its projection for the economy to contract 8.2 percent. The GDP report for the three months through June is due on Aug. 13.

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.