-Mari Iwashita, chief market economist at SMBC Friend Securities
A senior Bank of Japan official said that the central bank's quantitative easing makes it easier for banks to lend money as it pushes interest rates lower. QE programme also helps fuel demand for funding and contributes to overall growth, BOJ Executive Director Masayoshi Amamiya. While QE is known for debasing the value of nation's currency, Bank of Japan Governor Haruhiko Kuroda believes that a weak Yen is positive driver for the economy as long as the currency moves in line with fundamentals. A weak Yen is advantageous to exporters, but can be a negative factor for household incomes and firms, which import goods, BOJ Executive Director Masayoshi Amamiya added. Even so, Japanese Economics Minister Akira Amari highlighted the government is not pursuing a policy to intentionally devaluate the Yen. Amari said it is necessary to keep a close eye on any negative effect from rising import prices.
In the meantime, Japan's industrial production was revised to show a steeper than previously reported drop in August, final data from the Ministry of Economy, Trade and Industry showed. Industrial output fell 1.9% month-on-month in August, which was faster than the 1.5% decline estimated earlier. In July, production had decreased 0.4%. On an annual basis, industrial output fell 3.3% in September, exceeding the flash estimate for a 2.9% drop and following the 0.7% fall in July.
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