MNI POLICY: Japan Govt Cuts Econ View; 1st Time Since Apr 2020

Japan's government has cut its main economic assessment from the previous month for the first time since April 2020 in the wake of the impact of the state of emergency. The latest outlook report, published Friday, said the Japanese economy "shows weakness in some components" although with some signs of picking up, despite the risks from the virus.

The government also lowered its assessment on private consumption, noting it has been "in a weak tone recently."

"Private consumption is weakening but income isn't as bad as the weak spending," a Cabinet Office official said, adding that "private spending is expected to pick up soon."

But the assessment on capital investment and corporate profits was upgraded from the previous month. Business investment is "showing movements of picking up recently," the government report said.

The report also said that corporate profits "are picking up as a whole, while weakness is seen in non-manufacturers due to the influence of the infectious disease."

NEAR-TERM OUTLOOK

The government largely retained its near-term outlook, saying the economy is expected to pick up, supported by fiscal and monetary policies and the improvement in overseas economies while "socio-economic activities will resume" as measures to prevent the spread of infectious disease are put in place "even after the state of emergency is lifted."

However, the report said that full attention should be given to the further increase in downside risks due to the spread of the infectious disease in Japan and abroad.

"Attention should also be given to the effects of fluctuations in financial and capital markets.," it said.