MNI POLICY: Japan Govt Cuts Econ View; Getting Worse Rapidly

     TOKYO (MNI) - Japan's government lowered its overall economic assessment

for a second straight month Thursday, saying the economy is getting worse

rapidly and is extremely severe.

     It is the first time in almost 11 years that the government used the

wording "worse" in describing economic climate.

     "The Japanese economy is getting worse rapidly in an extremely severe due

to the Novel Coronavirus," the latest government economic report said.

     The previous assessment was "the Japanese economy is in severe situation,

extremely depressed by the Novel Coronavirus."

     The government also lowered its assessment of private spending, production,

corporate profits, labor market situation and exports, noting consumption was

"decreasing rapidly, due to the influence of the infectious disease".

     It also said, "Industrial production is decreasing, due to the influence of

the infectious disease." The downward revision is the first since December 2019.

     "Exports are decreasing recently due to the influence of the infectious

disease," it added.

     The downward revision of exports is the first since January 2019.

     The government previously said, "exports are in a weak tone."

     --EMPLOYMENT

     "(The) employment situation has seen some weak movement lately, due to the

influence of the infectious disease," it said. The downward revision is the

second straight month.

     As for the near-term outlook, the government strengthened its warning

modestly, saying, "An extremely" severe situation is expected to remain due to

the influenced of the infectious disease.

     "Moreover, full attention should be given to the further downside risks to

the domestic and foreign economy which are affected by the influence of the

infectious disease," the government said.

     It continued, "Also attention should be given to the effects of

fluctuations in the financial and capital markets."

     Prime Minister Shinzo Abe on April 7 declared a state of emergency and

requested people not to go out. The state of emergency includes seven

prefectures, that is, the Tokyo Metropolitan area (Tokyo, Kanagawa, Chiba, and

Saitama), Osaka area (Osaka and Hyogo), and Fukuoka. Their GDP is 45.6% of total

output in Japan.

     PM Abe on April 16 expanded the state of emergency to the entire country as

the new coronavirus cases. continue to rise.

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

[TOPICS: MAJDS$,M$A$$$,M$J$$$,MGJ$$$]