"The economy will probably contract for two consecutive quarters through the end of the year"
- Azusa Kato, an economist at BNP Paribas SA
Japanese residents increased their purchase of foreign bonds last week, a negative sign for the world's biggest economy, as investors are not willing to invest money in the nation's economy. The report by the Ministry of Finance showed that Japanese investors bought 494.2 billion yen ($6.0 billion) in overseas bonds and notes in the week ended November 30, while sold only 15.7 billion yen in overseas stocks and 6.4 billion yen in overseas short term securities. In the meanwhile, foreign investors purchased Japanese government bonds in total of 350.2 billion yen, 184.3 billion yen in stocks and 2059.5 billion yen in short term securities.
"There are no positive signs in Japan's economy," as domestic demand slumps and external demand remains weak, said Azusa Kato, an economist at BNP Paribas SA in Tokyo. "The economy will probably contract for two consecutive quarters through the end of the year."
"The BOJ would likely come under increasing pressure," Chotaro Morita, chief strategist for fixed income at Barclays Plc in Tokyo, said before today's decision. "The December monetary policy meeting is scheduled to take place after the presumed election date, suggesting pressure for additional easing could exert an influence at an early stage."
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