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Japan econ to show moderate growth
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TOKYO: Japan's economy is set to stay on a moderate recovery trend and the chance of a double-dip recession is fairly slim despite recent sharp gains in the yen that are likely to hurt exports, a monthly Reuters poll shows.
Growth, however, is expected to slow in the final quarter of this year and into January-March next year as the effects of government stimulus, such as tax benefits for energy-efficient cars, fade.
The poll forecasts Japan's economy will grow 0.5 per cent in the third quarter from the previous quarter, and then increase 0.2 per cent in the fourth quarter.
In last month's poll, economists forecast a 0.4 per cent expansion for both the third and fourth quarters of this year.
Japan will be mired in deflation at least until the middle of next year, forcing the central bank to keep interest rates on hold at 0.1 per cent during that period, the poll of more than 50 economists showed.
"The impact of the strong yen is a bit worrying. It's a risk factor but as long as the dollar stays above 80 yen, it won't cause the recovery to derail," said Kyohei Morita, chief economist at Barclays Capital.
The yen has appreciated further since the August poll was issued and Japanese policymakers have tried to talk it down, threatening to intervene. It surged to a 15-year high against the dollar earlier on Wednesday.
Of those polled, economists gave a 30 per cent chance that Japan would enter a double-dip recession, in line with the previous month's poll.-Reuters
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