Free Trial

MNI: Japan Govt Keeps Econ View, Ups Capex

(MNI) TOKYO

Japan’s government left its economic assessment for the second straight month, but upgraded its view on capital investment due to the upward revision within the second preliminary GDP data, the Cabinet Office said on Friday.

The Japanese economy is recovering at a moderate pace, although it recently appears to be pausing, the government repeated, while business fixed investment “shows movements of picking up,” the first upward revision since October 2022.

The previous view was that capex “appears to be pausing for picking up.”

The GDP data showed capex rose 2% q/q in Q4, revised from the first preliminary estimate of -0.1%.

The government held its other assessments, such as private consumption, exports and inflation.

The government also maintained its near-term outlook, expecting the economy to continue recovering at a moderate pace with improved employment and income supported by policy effects.

However, it repeated its cautious view, noting slowing overseas economies presented downside risk to the economy, including the effects of global monetary tightening and the concern for 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,” it said, also pointing to the economic impact of the 2024 Noto Peninsula Earthquake.

As for policy stance, the government said that the BOJ decided to change its monetary policy framework and added, “The Government and the BOJ will continue to work closely together to conduct flexible policy management in response to economic and price developments.”

The government didn’t declare the end of deflation but said, “Through these managements, the Government and the Bank will foster widespread recognition among the public that there is no going back to deflation, and will lead to an end to deflation. Then, the Government will mobilize all possible policy measures to transform the Japanese Economy into a new growth-oriented economy.”

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.