NewswireToday - /newswire/ -
Bunkyo-Ku, Tokyo, Japan, 2007/06/12 - Jacobs & Burns finally made it to keep rates on hold, from their corporate headquarters in Tokyo, Mr NG Nagasaki said that they are back in market business and spoke about Bank of Japan's plan in increasing the interest rate.
From their corporate headquarters in Tokyo, spoke person of Jacobs & Burns, Mr NG Nagasaki, explained that " Year ago, Jacobs & Burns experienced falling prices that contributed to bank failures. But now that they are back, it is only a reminder to the Bank of Japan that the raise of interest rates must not too high nor too fast."
Mr NG Nagasaki, continue saying " There are three reasons why the situation is not yet disastrous. First, this is one month's data and the trend in inflation is still up. Second, due to the lowering of oil price that which benefited the economy of Japan in other ways. Third, which is the most important, the economic backdrop has improved since the deflationary years earlier this decade. the banking sector has been restored to something that resembles health and growth out put."
He went on by saying "The trouble sometimes is that normal economics do not seem to be working, something the Bank of Japan, which put up interest rates, that really seems very reluctant to accept. meanwhile, with only half percent of interest, it is hard to find for the bank to make money and in some part of Japan there are signs of an incipient boom in the property market. Excess demand and property speculation are likely to cause inflation in the future which is he goal of Japan's Bank is to head that inflation off.
He paused before saying "Lot of people are not working at all, not working very much, or just producing little with their work which gives give a result of increasing unemployment. Businesses poured thousands of billions of yen into factories, buildings and infrastructures, which turned out, japan could not make use of all the stuff and investments turned into bad debt for the banks. Lot of excess capital has invests far more in new capital than it's rival in Europe and North America. Some of that capital may not be fully used."
He further went on to finish his speech by saying "There are reasons for optimism about the Japanese economy. The export sector is still world-class and as long as the US economy keeps going it will surely contribute to growth. Japan's recovery is likely to c0ntinue if it is allowed to with slow but steady growth over the next few years. There are risks on keeping interest rates low. For the foreseeable future the Bank of Japan should keep rates on hold."
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