WAKAYAMA – A Bank of Japan Policy Board member expressed caution Thursday over the prospects of some emerging markets, saying their slowing growth has been a major cause of Japan’s trade deficits.
“Though the country’s exports have been picking up as a trend, they continue to lack momentum to some extent,” Yoshihisa Morimoto said in a speech in the city of Wakayama, adding that exports have been affected significantly by stagnation in ASEAN countries, which have strong links to the Japanese economy.
Morimoto warned that some emerging economies “require attention,” as they face structural problems like fiscal and current account deficits as well as an outflow of funds amid the scaling back of monetary easing by the U.S. Federal Reserve.
Some emerging economies “are likely to lack momentum in growth for the time being,” though they are likely to benefit from positive effects stemming from a recovery in developed economies in the long term, Morimoto said.
Morimoto meanwhile said he expects Japan’s exports to “increase moderately as a whole,” backed by accelerating growth in developed economies like the United States and Europe.
His speech came after the government said earlier Thursday that the country posted a record monthly goods trade deficit of ¥2.79 trillion in January despite an expansion in exports as the weaker yen and the suspension of nuclear power plants boosted energy import costs.