Japan Noda: FX moves pose downside risk to economy

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TOKYO, Nov 2 (BestGrowthStock) – Japan’s economic recovery faces
downside risks from currency moves and worries about a downturn
in overseas economies, Japanese Finance Minister Yoshihiko Noda
said on Tuesday.

Japan’s economy is at a standstill, following recovery from
recession with the help of export demand from Asia, but the
economy is expected to continue growing as overseas economies
improve, Noda said in parliament, according to the text of a
speech.

Noda made the comments after Prime Minister Naoto Kan’s
cabinet submitted an extra budget with 4.4 trillion yen ($54.56
billion) in spending to bolster the safety net for job seekers
and children, secure rare earth minerals essential for the
production of many high-tech goods, and expand subsidies for
energy-efficient technology.

Helping the economy has become an urgent task after a
contraction in industrial production for a fourth month raised
questions on whether Japan is headed toward recession.

The yen’s (JPY=: ) surge to a 15-year high versus the dollar
complicates matters further as it makes Japanese exporters less
competitive.

Noda said he hoped the measures would help pull Japan out of
deflation and ensure economic recovery. Many economists have
played down the impact of the budget, partly because expanding
the safety net would not give gross domestic product an immediate
boost.

The cabinet plans to fund the budget without issuing new
bonds, by using reserves from higher-than-expected tax revenues
and lower debt servicing costs.

The ruling Democratic Party hopes to pass the budget soon but
will first have to debate it in parliament with opposition
parties.
($1=80.65 Yen)
(Reporting by Stanley White; Editing by Edmund Klamann)

Japan Noda: FX moves pose downside risk to economy