The Bank of Japan painted a gloomier picture of the economy in a report released Wednesday, saying growth is slowing down even further.
Weak household spending since April has gradually begun to affect production, with business sentiment also weakening, the BOJ said in its monthly economic review. But corporate profits, employment and income conditions still continue to improve modestly, it said.
"It is undeniable that the mechanism needed for a recovery is weakening," Masayuki Matsushima, head of the BOJ's Research and Statistics Department, told reporters. "I think on the whole there is little difference between us and the Economic Planning Agency regarding our judgments of the economy," Matsushima said.
On Nov. 14, the EPA said the economy was at a standstill, a retreat from its long-held assessment that it was on a mild recovery path. Five days later, BOJ Gov. Yasuo Matsushita said business sentiment was worsening as the economic slowdown that began in April continued.
Wednesday's review put more emphasis on the slowdown. The report said the growth of money supply has recently slowed and industrial production has dropped somewhat.
With your current subscription plan you can comment on stories. However, before writing your first comment, please create a display name in the Profile section of your subscriber account page.