MNI: Japan Govt Keeps Econ Assessment; Upgrades Corp Profits
Japan’s government left its overall economic assessment in March for the eighth straight month but upgraded its view on corporate profits for the first time since September 2023, the Cabinet Office said on Wednesday.
The government also clarified its warning toward the impact of high prices on sentiment and spending.
The assessments on other major components, such as private consumption, capital investment and production, were left unchanged from the previous month.
The government said that the Japanese economy is recovering at a moderate pace, although it recently appears to be pausing in part.
It said that corporate profits are improving. The previous view was that corporate profits are improving “as a whole, although the pace has become moderate.”
The government said that private consumption shows movements of picking up, although it remains paused in part, while consumer prices have been rising.
As for the near-term outlook, the government maintained its optimistic view, saying that 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.
The effect of continued price increases on private consumption through a downturn in consumer sentiment and the impact of policy trends in the U.S. such as trade policy” are downside risks to Japanese economy," the government warned. “Full attention should be given to the effects of price increases, policy trends in the U.S., such as trade policy,” the situation in the Middle East and fluctuations in the financial and capital markets.”
The government left its assessment on overseas economies for the ninth straight month, saying they are recovering, although the stagnation is observed in some regions.
But it warned that the recovery of global economy could slow and voiced concern over the downside risk to the global economy to be caused by U.S. trade policies and attention should be paid to volatile financial and capital markets.