MNI POLICY: BOJ Maeda Sees Big Contraction in Japan 4Q GDP

     TOKYO (MNI) - Japan's gross domestic product for the October-December

period might have contracted sharply on the back of the slowdown in overseas

economies, natural disasters and the post tax hike impact, according to a senior

Bank of Japan official.

     Speaking on Friday, Eiji Maeda, the executive director in charge of

monetary policy at the BOJ told lawmakers, "There is the possibility that

Japan's economy had contracted sharply for the fourth quarter.

     "But looking ahead, downside risks (to economic activity and prices) will

likely weaken and a moderate economic recovery will continue and prices will

rise amid solid capital investment and government spending."

     Maeda said the BOJ needs to pay attention to the impact of the coronavirus

on foreign tourism in Japan and on production as the BOJ continues to support

the economy through accommodative policy.

     He added that Japanese companies are suffering from labor shortages, but

the labor shortage is not restricted to Japan's economy.

     The Cabinet Office will release preliminary GDP for the October-December

period on Monday. Private economists expected the GDP to have contracted due to

weak domestic demand.

     The MNI median forecast is -1.0% q/q, or an annualized -3.8%, which is the

first contraction in five quarters. 

--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com

--MNI Sydney Bureau; +61 405322399; email: lachlan.colquhoun.ext@marketnews.com

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