Drop in housing investments hits Japan economy
The pace of Japan’s economic growth is slowing due to a big drop in housing investment and the slowdown is likely to persist for some time.
By Agencies |
TOKYO: The pace of Japan’s economic growth is slowing due to a big drop in housing investment and the slowdown is likely to persist for some time, a senior central bank official said in a speech on Thursday.
“The nation’s economic cycle is weakening now but the cycle itself remains intact,” said Toshiro Muto, one of the Bank of Japan’s two deputy governors.
“However, looking ahead, the economy will keep expanding in the future,” he told business leaders in Sapporo in northern Japan.
Muto’s remarks echoed the bearish economic assessment made by BoJ governor Toshihiko Fukui in December after the bank’s policy body voted unanimously to leave its benchmark interest rate unchanged at 0.5%.
Housing investment has slumped in Japan since tighter building regulations went into effect in late June. Builders have struggled to adjust to the new legal framework. Private residential investment plunged 7.9% in the July-September quarter, the largest drop since an 11.1% tumble in April-June 1997.
“The nation’s economic cycle is weakening now but the cycle itself remains intact,” said Toshiro Muto, one of the Bank of Japan’s two deputy governors.
“However, looking ahead, the economy will keep expanding in the future,” he told business leaders in Sapporo in northern Japan.
Muto’s remarks echoed the bearish economic assessment made by BoJ governor Toshihiko Fukui in December after the bank’s policy body voted unanimously to leave its benchmark interest rate unchanged at 0.5%.
Housing investment has slumped in Japan since tighter building regulations went into effect in late June. Builders have struggled to adjust to the new legal framework. Private residential investment plunged 7.9% in the July-September quarter, the largest drop since an 11.1% tumble in April-June 1997.
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