BOJ Ueda: China’s Slowdown Contributes to Economic Uncertainty, According to Reuters

TOKYO (Reuters) – Bank of Japan Governor Kazuo Ueda expressed concerns over the disappointing pace of economic activity in China, which may impact Japan’s economic outlook. His comments were made in a speech during the recent Jackson Hole Symposium.

Ueda highlighted that China’s economic indicators for July, including retail sales, business investment, and industrial production, were "on the weak side." He attributed these developments to ongoing issues within the property sector, which are negatively affecting the broader economy. However, he noted that Japan’s economic exposure to these Chinese weaknesses has been somewhat mitigated by the stronger performance of the U.S. economy.

In addition, Ueda pointed out that trade and foreign investment trends indicate that Japanese companies are shifting production from China to other parts of Asia and the United States, influenced in part by geopolitical risks.

He commented on the long-term uncertainties posed by geopolitical factors on the Japanese economy, particularly highlighting the escalating tensions in the semiconductor sector as a significant risk. Ueda noted, "Central banks will have a hard time factoring in these forces when making policy decisions."

Ueda’s remarks were presented during a session focused on globalization at the Jackson Hole Symposium held in Wyoming.

Geopolitical tensions between the United States and China continue to pose risks to global trade, affecting export-dependent economies like Japan. Relations with China have further deteriorated since Japan began releasing treated radioactive water from the Fukushima nuclear power plant into the Pacific Ocean, raising concerns from neighboring countries.