It would be “dangerous” for the Bank of Japan to increase stimulus beyond what it already planned before Prime Minister Shinzo Abe implements structural reforms in the economy, a top International Monetary Fund official said.
The Bank of Japan may need to provide more monetary stimulus if power shortages, supply chain disruptions and the nuclear crisis after the quake are prolonged, the International Monetary Fund’s No. 3 official said.
Japanese shares fell, with the Topix index erasing earlier gains, as data showed China’s manufacturing unexpectedly contracted, countering an advance by electronics shares including NEC Corp. and Nidec Corp.
Japanese Prime Minister Yoshihiko Noda called for talks to contain economic damage from a diplomatic dispute with China as Japan’s largest trading partner downgraded its delegation to an annual gathering in Tokyo.