The sluggish pace of increase in exports appears to have caused industrial production for the first half of 2013 to remain lower than a year earlier. As a result, business fixed investment remains lackluster, restraining growth in production. In the past, exports were usually the driving force of economic recovery in Japan.
With the exchange rate in fact significantly lower than assumed in the June Monetary Policy Statement, and interest rates significantly higher than assumed, it is possible that the immediate inflation track may be a little higher than projected in June because of the impact which the lower New Zealand dollar may have on the prices of goods like television sets, cars, and other imports.