A Japanese Voice of Concern

The Bank of Japan's Fukui notes "downside risks." But the central bank holds rates steady.


It's not just Alan Greenspan and Ben Bernanke. Bank of Japan Governor Toshiko Fukui has joined the chorus of voices worried about global economic growth. Speaking at a bank meeting yesterday, Fukui said, "There is concern that Japan will come under heightened downside risks from the global economy and that problems in the financial system could become somewhat bigger."

The Bank of Japan has not cut interest rates, and this meeting did not change that, as the nine members voted to keep things steady. Some members of the board argued at the meeting that short-term shocks to the market should not cause them to change course. But Fukui's comment suggests rate cuts may come if the U.S. economy continues to be sluggish, which would definitely affect Japan's export-based economy. Fukui's term as governor ends on March 19.