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MNI BRIEF: Prolonged Econ Weakness To Hurt Capex Further: BOJ

(MNI) Tokyo
TOKYO (MNI)

The Bank of Japan is mindful of the risk that prolonged weakness in the economy could hit capital investment and cause a serious downturn, the full text of the BOJ's Outlook Report released on Friday showed.

The BOJ expects capital investment to continue to downtrend in sectors directly affected by Covid-19, such as the services industry.

However, with financial conditions remaining accommodative as compared to the global financial crisis, "the capital stock adjustment will not be so significant," the report said. This is because "digital investment that is related to telework and remote services has been firm, and exports, which have high correlation with machinery investment by the manufacturing industry, have been increasing," the report said.

MNI Tokyo Bureau | +81 90-2175-0040 | hiroshi.inoue@marketnews.com
MNI Tokyo Bureau | +81 90-2175-0040 | hiroshi.inoue@marketnews.com

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