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MNI: Japan Govt Cuts Overall Econ View, Spending, Production

MNI (Tokyo)

Weakness has spread from services into other sectors.

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Japan's government has lowered its main economic assessment from the previous month for the first time since May and also lowered its assessment on private consumption and industrial production, the Cabinet Office said on Thursday.

Japan's economy is picking up, "although the pace has weakened" because of the severe situation from the spread of the novel, or Delta variant, coronavirus, the government said.

"Private consumption shows further weakness," the latest report said. The previous assessment was that private consumption weakness was noted "especially in service spending."

A Cabinet Office official said that in the latest report the weakness in the economy has expanding broadly from services to other sectors, so the government lowered the assessment.

The report comes ahead of a monetary policy review next week, see: MNI STATE OF PLAY: BOJ Policy Meeting To Mull Downside Risks.

Industrial production has seen "some weakness" recently, the government said. The previous view was that industrial production was picking up.

As for the near-term view, the government maintained that full attention should be given to downside risks due to the "situation in domestic and overseas injections and negative effects through the supply chains."

It also said, "attention should be given to the effects of fluctuations in the financial and capital markets."

But the government has maintained its recovery view, supported by the effects of monetary and fiscal policies and an improvement in overseas economies, while taking measures to prevent the spread of infectious diseases.