The Bank of Japan downgraded its monthly assessment of the economy and projected a future squeeze on industrial output, according to a monthly report released Monday.
The assessment for worsened economic conditions was made during the central bank's policy meeting last week when the BOJ decided against further easing. The speed at which economic conditions deteriorate and the pace of structural reform are seen as key determinants to when the BOJ will make its next move.
A fall in exports in overseas economies is being compounded by sluggish demand for information technology-related goods, the report says. This is causing "substantial" declines in production, and "adjustments in economic activities are gradually intensifying."