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Free AccessMNI: Japan Govt: Modest Econ Pickup Intact on Global Growth
TOKYO (MNI) - The Japanese government on Thursday left its overall economic
assessment for December unchanged for the sixth straight month, repeating its
view that the domestic economy remains "in a moderate recovery" amid solid
global growth.
It revised up its assessments of imports, capital investment and industrial
production while downgrading its view on public works spending.
The government confirmed that an earlier slip in imports was temporary and
that it didn't indicate a slowdown in domestic demand.
Imports are "showing signs of a pickup," the government said in its monthly
economic report. It is the first upgrade in 10 months. Last month it said the
pace of pickup in imports was stalling.
The Bank of Japan's real import index gained 1.7% on month in October after
falling 3.8% in September.
In the July-September quarter, orders for the latest Apple smartphones
models were slow, as some customers waited for the November release of the
iPhone X instead of rushing to buy the iPhone 8, which went on the market in
September.
In October, imports of telephones (mostly smartphones) rose 11.8% on year
after slumping 34.4% in September.
The government maintained its assessment of private consumption, which
accounts for about 60% of total domestic output, saying it is "picking up
moderately."
Japan's economy for the July-September quarter posted a strong 0.6% rise on
quarter, or an annualized 2.5%, as a rebound in net exports offset a slump in
consumer spending caused by bad weather.
The seventh straight quarterly expansion in GDP followed unusually strong
growth of 0.7% on quarter, or an annualized +2.9%, in April-June. The recent
annualized growth pace has been above Japan's potential growth rate estimated to
be just under 1%.
The Cabinet Office's Private Consumption Integrated Estimates index, which
is based on both supply- and demand-side data, posted the first month-on-month
rise in two months in October, up 0.1%, after falling 0.5% in September and
being unchanged in August.
Exports have been "picking up," thanks to strong demand for Japanese
chip-making machinery and chemicals as the usage of integrated circuits has
spread to many sectors, the government said. The assessment has been left
unchanged since being revised up in February 2017.
The government upgraded its view on business investment in equipment for
the first time in six months, saying it is "increasing moderately," instead of
"picking up."
The total amount of nominal capital investment rose to Y86.9 trillion in
the July-September quarter, recovering to the level seen before the 2007 global
financial crisis. It was the highest level since Y85.3 trillion recorded in
January-March 2007.
Production is also "increasing moderately," instead of "picking up." It was
the first upward revision in 12 months.
On the downside, the government downgraded its view on public investment
for the first time in two years after it posted the first quarter-on-quarter
drop in three quarters in July-September.
Looking ahead, the government maintained its outlook that the economy will
continue "recovering moderately," backed 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.
Earlier on Thursday, the BOJ also said it maintained its overall assessment
that the economy was expected to stay on a modest recovery trend, led by a
pickup in exports, factory output and business investment.
The BOJ slightly upgraded its view on consumer spending, which it now sees
as "increasing moderately, albeit with fluctuations" instead of "increasing its
resilience."
The BOJ also upgraded its assessment of business investment to "increasing"
from "increasing moderately," following a sharply revised up capex in Q3 GDP
data and solid investment plans seen in the BOJ's quarterly Tankan survey for
December.
But the BOJ downgraded its view on public investment, which is "more of
less flat" while keeping its high levels. It was "increasing" earlier but the
effects of last fiscal year's supplementary budget have faded.
--MNI Tokyo Bureau; tel: +81 90-4670-5309; email: max.sato@marketnews.com
--MNI Beijing Bureau; +86 (10) 8532-5998; email: vince.morkri@marketnews.com
[TOPICS: MAJDS$,M$A$$$,M$J$$$,MT$$$$,MGJ$$$]
To read the full story
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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.