Bank of Japan Gov. Masaaki Shirakawa said companies are fixing disruptions in their supply chains at a faster pace than expected as they rush to repair their facilities after the March 11 earthquake and tsunami.
Supply constraints are "being relaxed more quickly than expected initially as a result of strenuous efforts by firms," Shirakawa said Wednesday at an international conference at the bank's headquarters. "As supply-side constraints ease and production regains traction, the economy is expected to return to the moderate recovery path from the second half of fiscal 2011," he said.
Manufacturers said they plan to increase production 8 percent in May and 7.7 percent in June, evidence that the economy may resume growing after the disasters pushed the country into its third recession in a decade last quarter. Toyota Motor Corp. said Wednesday that its domestic output will recover to 90 percent of normal levels this month as the world's largest automaker gains access to more parts.
For now, the nation's economy remains under "strong downward pressure" and a deterioration in sentiment has weakened demand at home, Shirakawa said.
