--Miyazawa says impact of US slowdown on world econ not clear
--Miyazawa will watch yen, dlr to determine long-term direction

By Stephen Cannon, BridgeNews
Tokyo--Jan. 30--Finance Minister Kiichi Miyazawa Tuesday downplayed the impact on the global economy from the economic slowdown in the United States, saying that although many say that U.S. growth is flat now, he expects that by the second half of 2001 the U.S. economy will grow at a rate of 2-3%. However, Miyazawa conceded that until the impacts of the slowdown are actually felt, they're difficult to predict.
* * * Speaking on the U.S. slowdown, Miyazawa said, "Even if the first half of 2001 is flat, I think that the second half will show about 2-3% growth. I think that European economies are relatively good. So even when people talk about a global slowdown, that's about the extent of it."
Miyazawa added, "It's said that if U.S. growth declines to 2-3%, Japan's growth will decline 0.4-0.6%. But this is just according to calculations, we won't know until it happens. The Japanese economy is supposed to be getting better."
Speaking to the effects of another rate cut by the Fed on foreign exchange rates, Miyazawa said that he needs to watch the markets further and is unable to tell what kind of an impact the predicted rate cut will have on the dollar or the yen. Miyazawa added that he doesn't mean to say that he even expects the Federal Open Market Committee to cut the federal fund rate at their Tuesday meeting.
Summarizing the contents of his speech to be given before parliament Wednesday, Miyazawa said, "We need to put the economy on a recovery track. I want the growth in public demand to spur growth in private demand. The fiscal 2001 budget (April-March) has made government spending more efficient and as a result reduced the issuance of new bonds as much as possible," indicating that the Wednesday speech would bring no surprises to the market.
However, Miyazawa offered a note of caution on personal consumption, saying, "Considering that we included 9.4 trillion yen in the fiscal 2001 budget and added a reserve fund for public works, I wonder when private demand will recover and I am still cautious on consumer spending. I don't think we're at the stage where we can say that we've done enough." End