MNI: Japan Govt Keeps Overall  Economy; Ups Corp Conditions

Japan's government kept its main economic assessment from the previous month in October for the sixth straight month but upgraded its assessment on business conditions for the first time since July, the Cabinet Office said on Monday.

The assessment on public investment was lowered for the first time since November 2022.

The government repeated, “The Japanese economy is recovering at a moderate pace.”

It also said that corporate profits are improving as a whole. Firms’ judgment on current business conditions “are improving moderately as a whole.”

The improvement of business sentiment in the Bank of Japan’s Tankan survey was behind the assessment.

It also said, “Public investment is firm.” The previous view was public investment was strong.

The government left its assessment on private consumption, which is picking up.

However, an official at the Cabinet Office warned that consumer sentiment is becoming cautious on the back of high prices and weak real income.

The official also voiced concern over higher import price to be caused by high crude oil prices and its impact on consumer sentiment.

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 the policies.

However, the government maintained its cautious view, repeating that slowing down of overseas economies is downside risk of the Japanese economy, including the effects of global monetary tightening and the concern about the prospect of the Chinese economy.

It also said full attention should be given to price increases, “the situation in the Middle East” and fluctuations in the financial and capital markets.

However, the government maintained the assessment on overseas economies, saying that the world economy is recovering, although some weakness has been in some regions.