The Bank of Japan's biannual report on Thursday said that the Japanese economy is slowly recovering from the effects of the March 11 quake and tsunami. But it pointed out that it is unavoidable that the slowing down of overseas economies and the yen's historic rise in currency markets will negatively impact the economy. The same day, the central bank decided to boost the size of its asset purchase scheme by ¥5 trillion to ¥55 trillion to help underpin the economy.

As of July, the BOJ had predicted that the economy would grow 0.4 percent in fiscal 2011 in real terms and that the corresponding figure for fiscal 2012 would be 2.9 percent. In its latest biannual report, it revised the fiscal 2011 and 2012 growth rates downward to 0.3 percent and 2.2 percent, respectively. It also predicted that the economy will grow 1.5 percent in fiscal 2013. The BOJ issues its biannual report in April and October and carries out a mid-term assessment of the report three months afterwards.

Although the fiscal 2011 and 2012 growth rates were revised downward, they still should be regarded as relatively high. Supply chains devastated by the March 11 disasters are recovering faster than originally expected.