TOKYO (AP) — Top Japanese finance officials gave conflicting economic assessments Friday, with the central bank chief predicting a slowdown in Japan while the economy minister said she saw no sign of one.
But both said that downside risks were growing for Japan, the world's second-largest economy, amid soaring oil prices, volatile markets and an uncertain outlook for the U.S. economy, a key export market.
''The Japanese economy is slowing due to the drop in housing investment and will likely keep slowing for the time being,'' Bank of Japan Gov. Toshihiko Fukui told a parliament panel.
''Still, the economic recovery cycle is still intact and the economy is expanding as a trend,'' Fukui said.
Fukui's remarks came after bearish comments made Thursday by the central bank's deputy governor, Toshiro Muto, and further cemented expectations the Japanese central bank will not raise interest rates soon.
The BOJ last raised its key policy interest rate in February, from 0.25 percent to 0.5 percent. The central bank was widely expected to raise rates further, but held off to monitor the economy as problems from defaults on risky mortgages in the U.S. spread around the globe.
Speaking to reporters earlier in Tokyo, Economy Minister Hiroko Ota said she doesn't foresee stinted growth.
''At this moment, I don't think the economy is slowing down,'' Ota told regular press conference, saying she saw ''no indicators show a clear sign of slowing, and the economy is recovering.''
Ota acknowledged, however, that careful monitoring of the economy is necessary.
Recent economic figures out of Japan have been mixed. Industrial production has been uneven, falling in November after rising in October. The jobless rate is at 3.8 percent and core consumer prices rose 0.4 percent in November, the biggest rise in almost a decade. Sentiment at major companies has fallen to a two-year low, a recent central bank survey found.
The economy grew less than originally thought in the third quarter — expanding at a 1.5 percent rate instead of an earlier estated gain of 2.6 percent — due to a downward revision in corporate capital investment.
Finance Minister Fukushiro Nukaga, meanwhile, urged the central bank to work with the government to support economic growth.
''I would like to expect that the government and the Bank of Japan will work as one to underpin the economy and keep it on a growth path,'' he said.
