Japan central bank cuts economic growth forecasts
In its October outlook report, the Bank of Japan forecast the world's No 3 economy to grow 2.1 percent in the year through March 2011 and 1.8 percent the following year. Its July assessment projected growth of 2.6 percent and 1.9 percent respectively.
The weaker US economy was one of the main reasons for the downgrade, said Bank of Japan Gov Masaaki Shirakawa.
The "outlook for the US economy has turned pessimistic from optimistic," Shirakawa said at a press conference, according to Kyodo news agency.
The central bank also blamed the yen, which has risen to near historic highs versus the dollar, and the winding down of government stimulus measures.
Earlier in the day, the Bank of Japan left interest rates untouched and offered new details of a $61 billion asset purchase program intended to spur lending to companies.
In a widely expected decision, the nine-member policy board voted unanimously to keep its key interest rate at zero to 0.1 percent following a one-day meeting. The central bank at its last meeting earlier this month tweaked the interest rate for the first time since December 2008.
The meeting comes as Japan faces growing worries about its recovery, which is struggling in the face of a strong yen, persistent deflation and slowing growth in key overseas markets like the US and China. Recent economic indicators point toward deteriorating exports _ a key driver of Japan's economy _ and slowing industrial output.
Japan last month intervened in currency markets for the first time in more than six years, but the effects were short-lived. Prime Minister Naoto Kan's Cabinet this week approved an extra budget to finance $63 billion in stimulus spending; Kazinform cites China Daily.
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