Free Trial

MNI: Japan Govt Cuts Overall Economy, Capital Investment

(MNI) TOKYO

Japan’s government lowered its main economic assessment from the previous month in November, the first downward revision since January 2023 and also decreased its assessment on capital investment for the first time in 23 months, the Cabinet Office said on Wednesday.

The monthly economic report said the Japanese economy is recovering at a moderate pace, “although it recently appears to be pausing in part.”

It also said that business fixed investment “appears to be pausing for picking up.”

An official at the Cabinet Office said that corporate profits and sentiment remained solid but had not led to higher wages, capex and consumption.

“Capital investment plans were strong but the implementation of capex are delayed," the official told reporters. "Capex fell q/q in the third quarter (-0.6% in Q3 vs. -1.0% in Q2) for the second straight drop.”

He added high costs and uncertainties over the global economy were behind the delayed capex.

The official also said spending linked to services remained solid but spending on goods fell on the back of price hikes, while domestic demand lacks rising momentum.

However, the government left its assessment on private consumption, which is picking up, and other economic components.

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 its policies.

However, the government maintained its cautious view, repeating that slowing down of overseas economies presented a downside risk to the Japanese economy, including the effects of global monetary tightening and the concern over 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 office noted. The government maintained the assessment on overseas economies for the seventh straight month, saying the global economy is recovering, despite weakness in some regions.

MNI Tokyo Bureau | +81 90-2175-0040 | hiroshi.inoue@marketnews.com
MNI Tokyo Bureau | +81 90-2175-0040 | hiroshi.inoue@marketnews.com

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.