TOKYO, June 11 Bank of Japan board member Sayuri
Shirai warned Europe's debt crisis could hurt Japan's economy as
it could slow the country's exports via its impact on demand in
China, the text of a speech released on Monday showed.
In the speech, made last Saturday to a private audience,
Shirai also said the crisis in Europe would drive so-called
"safe-haven" flows to the yen.
Shirai, considered as among the more pessimistic board
members, said the central bank is doing its utmost to beat
deflation but that efforts were also needed on measures to raise
Japan's growth potential.
Uncertainty remains high on Japan's economic and price
outlook mainly stemming from debt problems in Europe, she added.
"The yen's rise, if prolonged, could hurt corporate
sentiment and put downward pressure on the economy. From this
point, I'm paying attention to the political and economic
situation in Europe."
The BOJ holds the next policy-setting meeting on June 14-15.