The Bank of Japan has downgraded its assessment of the economy for the first time in 11 months, blaming the growing uncertainty surrounding the global economic recovery "Japan's economy has stabilised as a whole, but there is greater uncertainty towards the recovery," the report said Referring to recent developments in key economic indicators, the bank said that exports "are losing their momentum," while the pace of increase in industrial output "has become slower as exports are not rising anymore"
It also warned that it expects this sluggish performance to continue for some time, noting that downside risks remain in both Europe and the US. "The recovery in overseas economies is likely to be anaemic at least for the time being. Therefore, exports and industrial production are expected to be more or less unchanged for the immediate future," the bank said However, it added that it still expects to see the Japanese economy experience some pick up in activity next year. The expected "gradual recovery" in overseas economies will boost exports and production, "making the foundations of Japan's economic recovery gradually firmer," it said ///www.fxcentre.com