Amid growing uncertainty about the future of the global economy, the Bank of Japan on Monday forecast that Japan's economy will show contraction for fiscal 2001 and that any recovery in 2002 will be slight.
Central bankers also forecast further price falls through fiscal 2002, but made no mention of the danger of the economy falling into a deflationary spiral in the Bank of Japan's biannual "Outlook and Risk Assessment of the Economy and Prices."
In the report, policy board members said the economy would shrink between 0.9 and 1.2 percent, instead of growing 0.3 to 0.8 percent as predicted in April.