Japan slowdown temporary, high oil to hit Asia: Minister
Japan slowdown temporary, high oil to hit Asia: Minister
Agence France-Presse, Tokyo
Japan's top economic minister Heizo Takenaka said on Sunday that Japan's growth slowdown in the June quarter was temporary, but expressed worry that high oil prices would severely hurt Asian economies.
The minister for financial affairs and economic and fiscal policy told an Asahi TV program that an auto recall scandal and the end of a large scale public works project temporarily dampened capital spending in April-June.
"From my point of view, this (the slowdown) is just the sum of temporary factors and is a minor adjustment to upward growth," said Takenaka.
Japan's gross domestic product (GDP) in April-June grew at an annualized rate of 1.7 percent from the previous quarter, disappointing average expectations of 4.2 percent and down from 6.6 percent growth in January-March.
Capital spending growth was flat compared to the previous three months, down from a 1.7 percent gain in the January-March quarter.
Takenaka said the recall cover-up scandal at Mitsubishi Motors and its truck-making affiliate dampened spending.
"There was a recall problem involving a large vehicle maker, so investment on transport equipment and demand for trucks dropped off," he said, adding capital spending fell in reaction to the end of large-scale municipal revival projects.
"What we really pay attention to, machinery orders, are not bad at all," he said. "We don't think capital spending will get very weak at all."
Core machinery orders grew 10.3 percent in the June quarter from the previous three months, the Cabinet Office said earlier this month.
The minister, a former Harvard academic who was elected for the first time to the upper house of parliament in July, added that high oil prices would hurt Japan and Asian economies.
Every US$10 gain in the price of oil per barrel shaves approximately 0.4 percentage points off Japan's annual growth and 0.8 points off Asian growth, he said.
"For the time being, we have to pay the most attention to the effect high oil prices have on Asia," he said.
The price of benchmark light sweet crude contract for September delivery closed at $47.86 a barrel on Friday, up more than $15 from a similar contract in early February.