Uncertainty over supply constraints: BoJ’s Nishimura

Kiyohiko Nishimura, a deputy governor at the Bank of Japan, on Thursday said there was a high degree of uncertainty about when supply constraints in the Japanese economy would be removed.

At a meeting with business leaders in Kanagawa, Japan, Nishimura said: "The sharp downturn in Japan's economy after the earthquake has been, simply put, triggered by supply-side shock from damage to production facilities, including damage to power supply capacity caused by the earthquake and tsunami."

Nishimura said when and how the supply-side constraints caused by the disaster will be removed was key to the economic outlook, but that it was difficult to say with certainty when the production capacity lost as a result of the earthquake would be restored. He said firms were making strenuous efforts to resume operations at affected production facilities but that progress had been slow due to various supply-side constraints including unstable power supplies.

Click here to read the speech.