22 October 2001, 09:44  BoJ's Hayami says uncertainty over Japanese economy is increasing

TOKYO (AFX-ASIA) - Bank of Japan governor Masaru Hayami said uncertainty over the future course of the Japanese economy is increasing following the Sept 11 terrorist attacks in the US. "Economic adjustments in our nation, as was evidenced by the spill-over of the (adverse) impact of the sharp decline of production to the labour and income conditions, are getting severe," the governor said in a prepared statement to the opening of a quarterly meeting of BoJ's branch managers. "In addition to such development, uncertainty over the future course of the economy is increasing further following the terrorist attacks in the US." The governor said while it is "unavoidable" for domestic demand to undergo adjustments, the "concern is growing that further decline in exports may further pressure the economy." The governor said BoJ will "pay attention to the risk" that fluctuations in the domestic and offshore capital markets may have on economic activity through the deterioration of business and consumer sentiment. "To prevent sustained price declines and pave the ground for sustained economic growth, the Bank of Japan will continue to make our utmost efforts," he said. Hayami said the resolution of the problem of bad debts is "indispensable", adding that it is also necessary to proceed with structural reforms in order to stimulate private demand.

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