- Koichi Hamada, economic adviser to Prime Minister Shinzo Abe
The Bank of Japan could expand its monetary stimulus to combat any surge in the Japanese Yen triggered by the Greek debt crisis, Koichi Hamada, economic adviser to Prime Minister Shinzo Abe said. However, Hamada underlined that any fallout from Europe would be limited. Moreover, Hamada even expected the nation's currency to weaken further on the back of the Fed moving closer to normalize its monetary policy.
In the meantime, Japan's core machinery orders rose to the highest level in seven years in May and were up for the third consecutive month, adding to signs of a gradual pickup in companies' spending and raising hopes of a more sustainable economic recovery. Japanese core machinery orders rose 0.6% in May on seasonally adjusted basis from a month earlier. The increase appeared to be better than a 4.9% decline expected by economists and followed the 3.8% rise in the preceding month. Machinery orders are often seen as a proxy of corporate capital investment, which tends to rise when businesses are planning to expand their operations. The Bank of Japan's latest quarterly "tankan" survey indicated that large companies plan to increase capex by 9.3% in the 12 months ending March 2016, a considerable change from the 1.2% cut they planned for the year in the previous survey.
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