Japan's economic growth is slowing "for the time being" as housing investment declines, Bank of Japan Gov. Toshihiko Fukui said Friday.
The economy will regain momentum because a cycle of profits feeding into wages and consumer spending, while "weakening temporarily," remains intact, Fukui told a parliamentary committee. "We'll closely examine both upside and downside risks and try to implement policy appropriately."
Goldman Sachs Group Inc. said Thursday there's a 50 percent chance of a recession in Japan and the central bank will refrain from raising the key rate from 0.5 percent, the lowest among major economies, until 2009.
Fukui told lawmakers that the bank will raise interest rates gradually as long as the economy's expansion is sustained.
"We don't have any preset notion of a policy action," he said, adding that the pace of rate adjustments depends on the economy and prices.