MNI: Japan Govt Cuts Economic View; First Time Since Nov 2023

The Japanese government has updated its view on the economy, noting it seems "to be pausing" despite the recovery continued at a moderate pace.

It also said private consumption “appears to be pausing for picking up.”

Industrial production, meanwhile, “was on the way to picking up, but manufacturing activities have declined recently due to the effects of suspension of production and shipment by some automobile manufacturers,” the government added.

The previous view held “industrial production shows signs of picking up.”

The government left other major economic components unchanged, such as exports, capital investment and the consumer price index.

As for the near-term outlook, the government maintained its optimistic view, saying the economy is expected to continue recovering at a moderate pace with the improving employment and income situation, supported by the effects of policies.

However, it maintained its cautious view, repeating that slowing down of overseas economies remains a downside risk to the Japanese economy, including the effects of global monetary tightening and the concern about the prospect of the Chinese economy.

“Full attention should be given to price increases, the situation in the Middle East and fluctuations in the financial and capital markets,” the government noted, adding attention should also focus on the economic impact of the 2024 Noto Peninsula Earthquake.

The government maintained the assessment on overseas economies for the 10th straight month, saying the world economy is recovering, despite weakness in some regions.