TOKYO (Reuters) - The Bank of Japan issued on Thursday a "heat map" of economic indicators, designed to monitor export conditions and visualise the possibility of a steep fall in exports, a move highlighting its concerns about external risks.
The heat map was compiled a day after the BOJ cut its inflation forecasts but stuck to its massive stimulus programme, with Governor Haruhiko Kuroda warning of growing risks to the economy from the U.S.-China trade war and slowing global demand.
The heat map on export conditions summarizes developments in the signals sent by 18 indexes, which are selected from about 250 economic indicators, the BOJ said in a full version of its outlook report analysing Japan's economy and prices.
The map is based on the assumption an indicator will signal the possibility of a near-future marked decline in exports if a trend shows a worsening from a certain threshold value.
The BOJ has been using a similar map aimed at gauging signs of overheating or stagnation in financial activity.
Many of the indicators that comprise the export map emitted signals when the IT bubble collapsed in 2001, and when the global financial crisis erupted in 2008, the BOJ said.
"Looking at the current situation, the share of indicators emitting signals remains at a low level," the central bank said.
However, indicators such as the output of metal shaping machinery in China are clearly below their threshold values, and the new export orders index of the global manufacturing PMI also has fallen close to the threshold value, it said.
"Downside risks concerning overseas economies are likely to be heightening recently, and it also is necessary to pay close attention to their impact on firms' and households' sentiment in Japan," the BOJ noted in the outlook report.
(Reporting by Tetsushi Kajimoto; Editing by Richard Borsuk)