Japan keeps warning on market volatility, raises view on capex in report

TOKYO, Oct 25 (Reuters) – In its monthly economic report released on Tuesday, Japan reiterated a warning that “full attention” should be paid to market volatility, following repeated government interventions in the market after the fall. yen for 32-year-old. low

With a yen-buying operation last week estimated at a record 5.5 trillion yen ($36.95 billion), and another suspected intervention on Monday, Japan is trying to stem a currency shortage that has raised the cost of imported goods for households and businesses.

The October economic report left its overall assessment of the economy unchanged for a fourth month, saying it was in a moderate recovery, although it raised its view on business spending while lowering its assessment of imports.

The government also maintained a reference to the need to “pay full attention to the impact of financial and capital market changes”, a warning it added in the September report.

The line “mainly refers to currency exchange trends, but is also meant to warn against the general volatility in other markets, including stocks and interest rate movements,” a Cabinet Office official told reporters before the report was released.

Officials raised their outlook on capital spending for the first time since February, due to robust spending plans indicated in the Bank of Japan’s (BOJ) quarterly business survey earlier this month.

Meanwhile, the assessment on imports was lowered on the decline in the volume of shipments from China and other Asian trading partners, even the value of imports in yen set a record in September.

On private consumption, which accounts for more than half of Japan’s gross domestic product, the government maintained its view that it is treading lightly. Utility costs have been rising, but consumer sentiment has weakened due to inflation, especially among low-income earners, the official said.

To support Japan’s fragile pandemic recovery and amid falling public approval ratings, Prime Minister Fumio Kishida’s government is set to release an economic stimulus package worth more than ¥20 trillion on Friday.

Despite the sudden resignation of Daishiro Yamagiwa, the minister in charge of economic recovery, the stimulus package will be announced by the end of October as planned, Kishida said on Monday.

The BOJ is expected to keep interest rates at very low levels to support the economy at a policy meeting ending Friday, even at the cost of accelerating the yen’s decline.

($1 = 148.8400 yen)

Report by Kantaro Komiya; Editing by David Holmes

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