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Japan's government lowered its main economic assessment from the previous month for the first time in three months in May, the Cabinet Office said Wednesday. The government's latest monthly report points to some additional weakness in some components, although it remains in a recovery mode, despite being in a severe situation overall due to the Novel Coronavirus.
The government also lowered its assessment on private consumption, for the first time since February, saying it "shows further weakness recently, especially in service spending." In April, the government said, "Private consumption has been in a weak tone recently."
A senior Cabinet Office official said consumer spending "worsened in mid-April. Spending recovered slightly but the level is below the level seen in March and April. That's a main reason of lowering the assessment."
The government also lowered its assessment on business conditions, saying that firms' judgments "appear to be pausing" picking up, while some severe aspects "still" remain. The previous assessment was that business conditions show signs of picking up.
The government maintained its solid assessment on exports and capital investment, seeing the former continuing to increase moderately and the latter picking up. Officials also slightly tweaked the near-term outlook, saying, "the economy is expected to show movements of picking up, supported by the effect of policies and the improvement in overseas economies while taking measures to prevent the spread of infectious disease."
The report warned that attention should be given to a further increase in downside risks due to the spread of the virus in Japan and abroad, with note given given to the effects of fluctuations in financial and capital markets.