China39;s downturn leaves Japan with little external support
China risks likely to be debated at BOJ39;s Sept meeting
Govt39;s Aug report warned of concern over China
Darkening global outlook cast shadow over BOJ exit path

TOKYO, Sept 7 Reuters Policymakers in Tokyo believe China39;s deepening economic woes could hit Japan39;s fragile recovery, especially if Beijing fails to shore up demand with meaningful stimulus, potentially delaying an exit from ultraloose monetary policy.

China39;s downturn would leave Japan39;s exportreliant economy with little external support as aggressive Federal Reserve interest rate hikes cool growth in the United States, another key driver of global activity.

The risks from China will be among key topics of debate at the Bank of Japan39;s September policy meeting, say five sources familiar with the bank39;s thinking, and raise fresh questions about Governor Kazuo Ueda39;s efforts to wean the economy off the massive monetary stimulus of the past decade.

What39;s happening in China is worrying and could deal a huge blow to Japan39;s economy, said one of the sources, who spoke on condition of anonymity due to the sensitivity of the matter.

A downturn in China may diminish the chance of Japan achieving sustained wage growth, which is a crucial condition for phasing out monetary stimulus, another source said.

In a sign of growing pessimism over China, the government also said its monthly economic report for August that concern over…