JAPAN

Economic Adjustment Phase: In a move that appeared to coincide with the growing cautiousness of government economic planners, the Bank of Japan in its quarterly economic outlook said that Japan’s economy has entered an adjustment phase. The report said the economy’s entry into the phase of adjustment reflected an inventory buildup as well as a further slowdown in the tempo of domestic demand growth as shown by falling housing investment and corporate capital spending. In its quarterly report, the Bank of Japan said steady growth in the number of job holders--a remarkable departure from the trend during the past economic slowdowns--is supporting the economy. Citing tight labor market conditions as well as still growing employment, it added that “the basic trend of the economy remains firm.” The central bank forecast, meanwhile, that Japan’s broadly defined money supply, M2 plus certificates of deposit, will show an average growth rate of between 2% and 3% during the January-March quarter.