Market settles down to wait for the FOMC decision
The Bank of Japan have bowed to negative stats at last and conceded that the current fiscal year will not see GDP reach 2.1% as forecast. This they now see as being closer to 1.8% reflecting Q1 negative growth, the sharp drop in housing starts and the now expected prolonged slowdown in the U.S.
However, they are bowing but not broken, retaining a forecast of a gradually recovering economy in FY 2009. This is still based on rising production, wages and consumer spending which in turn will fuel demand. Thus the forecast for FY 2009 GDP is back to 2.1%. They see CPI rising by 0.4% in FY 2009. And of course they still maintain the intention of gradually normalizing interest rates based on economic and price conditions. Of course the forecast will remain valid while the U.S. economy springs back into […]
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