- Haruhiko Kuroda, Bank of Japan Governor
Industrial output in Japan fell more than initially estimated in July, while the tertiary industry activity index, which tracks the change in the total value of services purchased by businesses, showed a slight growth over the same period. According to Ministry of Economy, Trade and Industry of Japan, industrial production dropped 0.8% on a monthly basis in July, revised from the 0.6% decrease reported earlier. On an annual basis, the gauge showed no variations in July, following the 2.3% gain in June. In the meantime, shipments contracted by 0.4% in July, revised from a 0.3% drop, while inventories went down 0.8% from the preceding month. In contrast, the production index rose 1.1% in June.
Meanwhile, the BoJ policymakers disagree the economy needs more monetary stimulus despite growing downside risks from slower overseas demand and volatile financial markets. The officials claim that it is still too early to abandon their recovery scenario and consider buying more assets, as the data for August economic activity is not available yet. The BoJ believes that the existing pace of monetary-base expansion by ¥80 trillion annually should be sufficient to support a modest economic recovery and raise inflation to around 2% by the middle of 2016.
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