BOJ warns of sluggish export recovery

Sluggish Asian demand and a shift in Japanese production overseas will continue to weigh on exports, the Bank of Japan said, underscoring its waning conviction that overseas shipments will soon pick up and support a fragile economic recovery. The central bank also warned that while factory output is likely to rise moderately, production of automobiles and personal computers may remain weak due to soft demand. ‘China’s economy is set to sustain stable growth but excess slack in its manufacturing sector, which has a big effect on Japan's economy, remains a problem,’ the BOJ said in a monthly economic report for August released on Monday. ‘Some other emerging nations ... may also see growth lacking momentum for a prolonged period,’ while a continued shift in Japanese production overseas will also cap export growth for the time being, it said. The report said exports will likely ‘head for a moderate recovery,’ offering a slightly gloomier view on the outlook than last month, when it said more clearly that overseas shipments will ‘recovery moderately,’ according to Reuters.