June 11, 2012 / 12:45 AM / in 6 years

BOJ's Shirai warns on risks from Europe debt crisis

TOKYO, June 11 (Reuters) - 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.

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