Japan's government raised its main economic assessment for the first time in three months and also its assessment on private consumption and employment while keeping an eye on a surge in Covid-19 cases, the Cabinet Office said on Tuesday.
“The Japanese economy is picking up moderately.” The previous view was “The Japanese economy shows movements of picking up," the Cabinet Office said, with an official adding that the upward revision was due mainly to a recovering private consumption, which supports spending and jobs.
A recovery of services and entertainment spending, was noted by the official, although spending on durable goods and automobiles is being weighed down by the supply gaps. But the official said that the spread of Covid-19 cases is being monitored for the impact on spending.
“Private consumption is picking up moderately,” the Cabinet Office said for the first time since April, and following a report that consumer confidence picked up in May, (See: MNI BRIEF: Japan May Consumer Confidence Rises, Govt Ups View).
The government left its assessment on the world economy unchanged, saying that the world economy is recovering, “although a standstill is seen in one region.”
As for the near-term outlook, the economy is expected to show movements of picking up, supported by the effects of economic policies, while all possible measures are being taken against infectious disease to proceed to normalisation.
However, the government warned of potential adverse impact from volatile financial markets, saying that full attention should be given to the downside risks due to “fluctuations in the financial and capital markets amid global monetary tightening, rising raw material prices and supply-side constraints.”