Export quotas and taxes have the effect of diverting the supply of raw materials to the producer's domestic economy, thus handing their manufacturers a competitive advantage in sourcing inputs.

Rising output in the domestic economy, robust business and consumer confidence, and rising exports of raw materials and agricultural products are fueling the economy.

In its monthly report the bank gave warning that the rising costs of energy and raw materials, coupled with the global credit crisis, would cause Japan's economy to slow.