MNI: Japan Govt Maintains Eco View; Modest Recovery Continues

     TOKYO (MNI) - The Japanese government left its overall economic assessment

unchanged in April, saying for the fourth straight month that the Japanese

economy is recovering at a "moderate pace," the Cabinet Office said Monday.

      The government also maintained its views on key components of the economy:

private consumption and exports are "picking up" while business investment and

factory output are "increasing moderately."

      On inflation, the government said that consumer prices "have risen

moderately in recent months," repeating its previous assessment.

      In March, the government revised up its view on inflation for the first

time in nearly three years.

      The latest data show Japan's core consumer price index (excluding fresh

food) rose 1.0% year-on-year in February, accelerating from a gain of 0.9% in

January. 

     The annual core inflation rate was positive for the 14th straight month in

February. 

     Japan's inflation has been slow to respond to the country's sustained

economic recovery and the increasing tightness of labor market conditions.

      Core CPI is still far from the Bank of Japan's 2% price stability target.

      Japanese policymakers are focused on how wage hikes resulting from the

rising labor shortage affect private consumption and boost consumer prices in

the coming months. 

     Wages on average rose 2.13% year-on-year as of April 6, up from 2.05% last

year, data released by the Japanese Trade Union Confederation (Rengo) show. 

     The Cabinet Office's Private Consumption Integrated Estimates Index, which

is based on both supply- and demand-side data, rose 0.5% on the month in

February, improving from -0.2% in January and -1.0% in December.

      Looking ahead, the government maintained its outlook that the economy will

continue "recovering," supported by an improvement in labor and income

conditions and the effects of fiscal spending. 

     It also repeated the risks to its outlook, citing uncertainty in overseas

economies and the effects of fluctuations in financial and capital markets.

--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com

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