TOKYO (dpa-AFX) - Bank of Japan (BoJ) will take appropriate policy actions in a flexible and decisive manner, while carefully examining future economic and price developments, including the effects of the recent foreign exchange rate fluctuation, the bank's Deputy Governor Hirohide Yamaguchi said Wednesday.
In a speech at a meeting with business leaders in Nagano, the policymaker said that the Bank is aware that uncertainties at home and abroad are significant.
Sovereign debt problems in Europe is likely to be a 'destabilizing' factor for some time not only within Europe but also in the global economy and Japan might also be involved in turmoil through a plunge in stock prices and appreciation of the yen, he warned.
Japan's economy is expected to return to the moderate recovery path in the second half of fiscal 2011 onward amid the continued improvement in overseas economies, he said.
According to the BoJ official, supply constraints have been rapidly alleviated and production and exports have been recovering faster than expected after the earthquake.
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