Japan News: BOJ Watching Global Economy Closely:

https://www.yahoo.com/finance/news/global-economy-bojs-kuroda-says-054602148.html

Article:

TOKYO/RIYADH, Feb 21 (Reuters) - Bank of Japan Governor Haruhiko Kuroda said he was watching the coronavirus impact on the economy with "grave concern," in a nod to the growing toll the epidemic is taking on manufacturing activity and exports across Asia.

The fallout from the health crisis will be a main topic of debate at a Group of 20 finance leaders' meeting in Riyadh, Kuroda said on Friday, in a sign it could overshadow the weekend meeting of the world's top economies.

Massive business disruptions in China are starting to spillover into the global economy, with parts shortages rippling through supply chains as far away as the United States. Asian economies that are heavily reliant on exports to China and Chinese tourists are being hit hard on both fronts.

Comments:

This article and later articles, have not commented that the Bank of Japan is now very concerned about the economy. Maybe before the virus situation, and the only variables were the sales tax increase, less business investment, and a decrease in exports, maybe could have been explained as just normal activity. But the virus situation has changed many variables in the mix.

Article:

"Huge uncertainty remains on how the spread of the new virus may affect the Japanese economy," Kuroda told parliament.

"We're watching the impact with grave concern and keeping a close eye on downside risks," he added.

The epidemic has already extracted a heavy human and economic toll in China, with over 2,200 deaths, prompting authorities to take strict containment measures.

Retail sales of passenger cars in China plunged 92% on an annual basis in the first 16 days of February, according to China Passenger Car Association (CPCA).

Japan's factory activity contracted at the sharpest pace in seven years in February, a private industry survey showed on Friday, adding to growing signs the world's third-largest economy is on the brink of recession.

Comments:

This might be old news by now, as sometimes the comments/commentary takes a while, but again normal variables, positive or negative would just be watched closely but with a serious concern for a recession, or even a full blown global crisis, that the global economy is looking at in the next few months. Or the possibility of.

Article:

South Korea's exports to China slumped in the first 20 days of February, indicating a grim outlook for Asia's fourth-largest economy.

Kuroda reiterated the BOJ's readiness to ease monetary policy further as needed. But he said it's "not time yet" to discuss specific monetary policy steps, suggesting the BOJ won't deploy its dwindling ammunition easily.

Japanese Finance Minister Taro Aso told reporters on Friday he will explain to his G20 counterparts that Tokyo is taking necessary steps to contain the spread of the epidemic, which has become "among risks to the global economy."

The weak yen, however, may offer Japanese policymakers some relief by boosting the value of profits Japanese manufacturers earn overseas, some analysts said.

Comments:

Yes, its quite possible that the BOJ might have limited resources to use in the current situation, especially if it gets even worse.  While South Korea exports to China, as of this article were down, exports overall for the month of February increased due to an increase in demand for semiconductor chips.

The weak yen can always be seen, for Japanese manufacturers as a positive, as the value of profits do rise. But will it be enough to offset losses in China in the near future.

Article:

GLOBAL IMPACT

Japan's economy shrank at its fastest pace in nearly six years in the December quarter, as soft global demand and last year's sales tax hike hurt consumption and business spending.

Some analysts expect the economy to contract again in the current quarter, dashing the BOJ's hope an expected rebound in global growth mid-year will underpin Japan's fragile recovery.

The damage from the outbreak is spreading across Asia with organizer's cancelling events, flight cancellations hurting tourism and fears of the virus keeping shoppers home.

Analysts are divided on how much the epidemic could hurt the global economy. Oxford Economics say its baseline scenario is for the outbreak to have a large but short lasting impact centered on China and the rest of Asia.

"We assume the economic effects are concentrated in the first half of 2020 and that the outbreak then starts to come under control," Oxford economists said in a research note.

Even so, the outbreak will cut global economic growth to just 2.3% in 2020, its weakest since 2009, they said.

In a note for the G20 finance leaders, the International Monetary Fund said a further spread of the epidemic could derail a "highly fragile" projected recovery in the global economy in 2020.

Comments:

The Japanese economy shrank at its fastest pace in nearly six years. Well lets see, what happened six years ago? The 2014 April sales tax increase from 5% to 8% and at the same time global trade had not really turned the corner completely as was seen in 2016/2017. So no real surprise that the Japanese economy was a little soft in Q4 in 2019.

Yes, the virus outbreak is/was an unknown variable that was not factored in the rebound in Q1 or even Q2 for the Japanese economy.

I agree the impact might be just centered in Asia, but the global economy will see some rough patches.

Again, the comments are a little late, as we saw the past week or so, the stock markets have fallen not seen since 2008/2009.
 

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