MNI: Japan Govt Tweaks Assessment On Consumer Price Index

Japan’s government tweaked its assessment on the consumer price index for the first time since May 2022, but left its main economic assessment for the second straight month in December, the Cabinet Office said on Tuesday.

“Consumer prices have been rising at a moderate tempo recently,” the government said. The previous view held “Consumer prices are rising.”

An official at the Cabinet Office told reporters that the rise of core-core CPI, which the government focuses on, has slowed as the rise in food prices marks time. Food price hikes are decelerating and households’ inflation view on future rises is slowing and stabilising, he added.

As for the overall assessment, the government repeated that the Japanese economy is recovering at a moderate pace, although it recently appears to have paused in part.

The government also upgraded its assessment on corporate sentiment for the first time since October 2023 following the improvement of major business sentiment in the Bank of Japan’s December Tankan business sentiment survey released Dec 13.

"Business sentiment is improving,” the latest report said. The previous view noted business sentiment is improving moderately as a whole.

UNCHANGED ASSESSMENTS

The government left its assessment on other major economic components, including exports, private consumption and production.

As for the near-term outlook, the government maintained its optimistic view, noting it expects the economy to continue recovering at a moderate pace as employment and incomes improve, supported by the effects of its policies.

However, the government maintained its cautious view, repeating that slowing of overseas economies presents a downside risk, including the effects of global monetary tightening and the slowing Chinese economy.

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

It maintained its assessment on overseas economies for the eighth straight month, saying the world economy is recovering, despite weakness in some regions.