MNI: Japan Govt Holds Economic View, Major Components

Japan’s government left its economic assessment for the third straight month and also maintained its view on major economic components, such as private consumption, exports and industrial production, the Cabinet Office said on Tuesday.

The government repeated that private consumption appears to have paused on the back of high prices.

But an official at the Cabinet Office said that a consumption recovery is expected as labour and income conditions improve on the back of hefty wage hikes at major firms, which will filter through to smaller firms.

The government said that business conditions are improving but added “some manufacturers are affected by the suspension of production and shipment by some automotive manufacturers.”

As for the near-term outlook, the Cabinet Office maintained its optimistic view, noting the economy is expected to continue recovering at a moderate pace with the improved 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 remains a downside risk to the Japanese economy, including the effects of global monetary tightening and concern over 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 added. “In addition, full attention should be given to the economic impact of the 2024 Noto Peninsula Earthquake.”

The government maintained the assessment on overseas economies for the 12th straight month, noting the world economy is recovering, despite pointing to weakness in some regions.