"I expect the BOJ to maintain its stance of supporting the economy by keeping a lid on yields"
- Yasuhide Yajima, the chief economist at NLI Research Institute Ltd.
Japan's key business confidence index dropped for a first time in six months in April, as bad weather conditions weighed on demand for spring clothing, the government said on Friday. A gauge, which measures a sentiment in the nation's current economic situation among so-called "economy watchers" tumbled 0.8 points to 56.5 from March, when it surged to 57.3. In March, the reading tried to reach the highest level since March 2006 amid growing hopes for Prime Minister Shinzo Abe's economic policies introducing unlimited quantitative easing and large-scale public works projects. Even despite the drop, the government left unchanged its basic assessment of the monthly survey in April, as the economy is starting to gain pace.
"I expect the BOJ to maintain its stance of supporting the economy by keeping a lid on yields," said Yasuhide Yajima, the chief economist at NLI Research Institute Ltd.
"They've fired a big cannon that creates asset price inflation without the necessary structural reforms," Paul Guest, head of Asia research at LaSalle investment management, said. "The single biggest worry is that this is a flash in the pan."
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