"Domestic political uncertainty is an issue for businesses but the global backdrop is a greater concern.
Growth is not expected to pick up noticeably until we enter the latter half of the fiscal year when, hopefully, structural reforms have progressed further and the global backdrop is more benign.
First, the global backdrop: Factors tightening supplies include harsh weather in Europe, a cutback in exports from producers like Syria, Yemen and South Sudan, growing demand from India and China, and, increasingly, international measures imposed on Iran.
"Witnessing this against the global backdrop of a resurgence of the far-right, it's essential that those who find these developments unacceptable make their thoughts known and take action".
Against this global backdrop, a complex set of factors-such as socio-cultural and transition experiences, education, income, social status, housing, employment, health services, personal health practices, and the physical environment-comes into play.
Reconstruction demand and a recovery in industrial output are likely to buoy the economy, said Cameron Umetsu, senior economist for Japan at UBS. "But the murky global backdrop still holds the potential to serve up nasty surprises for export-sensitive Japan," he said.
"Growth is likely to be weak in the near term but further out a continued easing in domestic credit conditions, supported by the Bank's asset purchase programme and the Funding for Lending Scheme, together with the stronger global backdrop, underpin a slow but steady recovery in output," the governor said.
Investors are also awaiting the first speech of the new year from the Bank of England governor, Mark Carney, and hoping for assurances that interest rates will stay at their record low for many months given the shaky global backdrop, a slowdown in the UK economy and low inflation.
In a report Sept. 21, Standard & Poor's noted that the weaker global backdrop, combined with generally high inflation, could slow the pace of upgrades for some Asia-Pacific sovereigns and could bring rating reductions for countries with weak balance sheets.
The improved global backdrop has created demand in disparate areas, including air transport, with the International Air Transport Association saying on Thursday that global demand for passenger traffic had risen 5.5 percent in September from a year earlier.
"Despite the deteriorating global backdrop, U.S. manufacturing continues to expand," said Paul Ashworth, chief United States economist at Capital Economics.
