Japan on track for recovery despite weak GDP, says BOJ’s Ueda

BANK of Japan governor Kazuo Ueda said on Thursday (May 23) the country’s weak first-quarter gross domestic product data did not alter the central bank’s view that the economy is on track for a moderate recovery.

As for overseas risks, the biggest focus was on whether the US economy will successfully achieve a soft landing, Ueda told reporters ahead of a meeting of finance leaders from the Group of Seven (G7) advanced economies.

“Data showing Japan’s economy contracted in the first quarter came after our policy-setting meeting in April. But this hasn’t changed much our view on Japan’s economy,” Ueda said.

The contraction in Japan’s first-quarter GDP was due largely to auto output disruptions that are likely to ease in the second quarter and beyond, he said.

An expected increase in nominal wages is likely to underpin household income, Ueda said, offering an upbeat view on the outlook for consumption. REUTERS