TOKYO: Bank of Japan Governor Masaaki Shirakawa on Wednesday offered a bleak assessment on the country's economic outlook but said the central bank was already taking bold steps to support growth.
The central bank is set to keep monetary policy on hold at a two-day rate review that ends on Friday, but has expressed its willingness to act if fears of a global recession and Europe's debt crisis threaten to derail Japan's fragile recovery.
"I hold a very severe view of Japan's economy and its outlook," Shirakawa told parliament, when asked by a lawmaker whether he agreed with the view that the country faced various risks such as a stubbornly strong yen.
"Taking this view into account, the BoJ has conducted powerful monetary easing," he said, countering criticism that it was not acting aggressively enough to support the economy and stem sharp rises in the yen.
The BoJ has said Japan's economy is expected to resume a moderate recovery by the end of this year, but has warned that the forecast faces various risks such as the fallout from the global economic slowdown and Europe's debt crisis.
Shirakawa's remarks are in line with this view, although they underscore the central bank's wariness over the potential damage to business confidence from persistent yen rises and slumping stock prices.
The BoJ has stood pat since easing policy in August in coordination with the government's yen-selling currency intervention via an increase in its asset buying programme, under which it buys government bonds and private debt.
Shirakawa said the BoJ has taken bold steps to support the economy that are unmatched by other central banks, such as buying government bonds and exchange-traded funds.
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