In response to this, a few members said that a slowdown in the U.S. economy had been hoped for, and a deceleration from the high growth rate of 5 percent to 3 percent was likely to contribute to a sustained global economic expansion.
A few members expressed the recognition that, although such developments as a weakening in production stemming from the tightening of gas emission regulations on automobiles had been observed, domestic demand such as business fixed investment and private consumption remained more or less firm.
A few members said, however, that there could be a risk that the adjustments would be unexpectedly significant since developments in IT-related goods were difficult to forecast, and therefore future developments, such as Christmas sales, warranted careful monitoring.
A few members expressed the view that, in addition to investment aimed at saving labor and at streamlining business processes to deal with the labor shortage, investment related to information and communications technology-- such as for AI-- as well as that aimed mainly at increasing production capacity-- such as expanding factories-- had started to increase.
A few members said that Japanese stock prices had declined toward the middle of August, but against the background of the continuing economic recovery, started to rise thereafter reflecting the rebound in U.S. stock prices, and were recently moving slightly above the level at the time of the previous meeting.
A few members said that while old economy industries were supported by a series of monetary easings, new economy industries, which depended on future profit streams, were unlikely to be supported by low interest rates and it was hard to predict when they might hit bottom.
A few members said that if the potential growth rate had become higher than the Bank's assumed rate of approximately 1 percent presented in the Outlook Report, this might affect the Bank's outlook for prices through developments in the output gap and unit labor costs.
On this point, a few members said that, although the U.S. protectionist trade policy had been criticized at international conferences such as the Group of Seven(G-7) meetings, there were no pronounced signs at the moment that the situation surrounding the policy would improve.
A few members said that this could have been due to various factors that increased uncertainty about the economic outlook at the time the forecast was made, such as weak stock prices, SARS, and the military action against Iraq.
However, a few members said that, in the present situation where market interest rates including those on term instruments had declined substantially, a discount rate cut would not have much easing effect, and it should rather be considered as a measure to secure liquidity in the markets.
A few members said that households' cost-saving mentality had persisted and an increase in the tolerance of price rises had been lagging behind, due in part to the sluggishness in wage increases as well as cautious views regarding economic growth and the social security system going forward.
A few members said that, in addition to these weak fundamentals of Japan's economy, supply-demand factors indigenous to Japan, such as unwinding of cross-shareholdings and selling of stocks by corporate pension funds, which were returning funds entrusted to them in order to discontinue acting on behalf of public pension funds, were exerting downward pressure on stock prices.
On this basis, a few members expressed the view that, although exports were likely to maintain their moderate growth for the time being, uncertainties over future developments such as the effects of the trade friction between the United States and China had heightened.
A few members expressed the recognition that IT-related exports were likely to pick up firmly, on the back of an expansion in demand for data centers and motor vehicles, although their growth had decelerated temporarily since the turn of the year due to global production adjustments for semiconductors.
Meanwhile, a few members expressed the recognition that structural problems associated with demographic changes and technological innovation-- which would have an impact on financial institutions' business environment-- and the effects of monetary easing should be analyzed and discussed independently of each other.
A few members said that, given that long-term interest rates in Japan were recently moving more closely with those overseas, particularly those in the United States, the effects of a rise in U.S. long-term interest rates on Japanese long-term interest rates would require monitoring.
A few members expressed the recognition that the global adjustments in the manufacturing sector continued as the Global Purchasing Managers' Index(PMI) for manufacturing had declined below 50 in May and the world trade volume had not yet recovered.
A few members expressed the recognition that the likelihood of the firm growth in overseas economies being sustained was increasing, as suggested by the fact that international organizations and central banks recently had been revising their economic growth forecasts upward for major countries and regions.
A few members expressed the view that although some indicators, for example, shipments of capital goods, were not strong, the Financial Statements Statistics of Corporations by Industry, Quarterly and some indicators to be released in the near future could confirm that the rising trend in business fixed investment was firm.
A few members expressed the view that production in Germany had been sluggish, due particularly to the effects of the tightening of gas emission regulations on automobiles, but domestic demand such as business fixed investment and private consumption remained more or less firm.
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