- Nobuyasu Atago, principal economist at the Japan Center for Economic Research and a former BOJ official
Japan's machine tool orders improved slightly last month, suggesting measure introduced by the Bank of Japan are boosting investors' and businesses' confidence. Moreover, the situation is expected to improve further, as latest data shows the new Governor of the Bank of Japan Haruhiko Kuroda have already shifted the economy into a positive cycle with the gradual expansion of corporate production and an improvement in unemployment. A gauge, which measures a change in the total value of new orders placed with machine tool manufacturers, fell 24.1% in April from the same month a year earlier, after a 26.1% slump in the prior month.
"Keeping expectations high will be extremely difficult for Kuroda," said Nobuyasu Atago, principal economist at the Japan Center for Economic Research in Tokyo and a former BOJ official. "The new central bank leadership will probably use the Tankan result as a reason to add monetary stimulus, as they'll argue that the BOJ shouldn't be throwing cold water on business confidence."
"After many years of deflation, and little or no growth, the new government has announced a new policy, based on aggressive quantitative easing, a positive inflation target, fiscal stimulus, and structural reforms," the IMF said. "This policy will boost growth in the short term."
© Dukascopy Bank SA