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--Japan Government's Downward Revision First Since March 2016
TOKYO (MNI) - Japan's government downgraded its overall economic assessment
Wednesday, saying that the Japanese economy is recovering at a moderate pace
"while weakness is seen recent in exports and industrial production in some
But the government didn't think the economic recovery has stalled, an
official at the Cabinet Office said.
Back in February, the government simply said, "The Japanese economy is
recovering at a moderate pace." The downward revision is the first time since
The government also lowered its assessment of industrial production for the
second straight month, saying, "Industrial production is almost flat", although
weakness is seen in some sectors. The previous assessment was "Industrial
production is increasing moderately" and weakness is seen in some sectors.
The government also lowered the near-term outlook for the economy modestly,
but maintained an optimistic view, saying, "Weakness remains for the time being
in some sectors" but the economy is expected to continue recovering, supported
by the effects of the policies, while employment and income situation is
However, the government warned that it must pay attention to "the effects
of situations over trade issues on the world economy, the prospect for China's
economy, the uncertainty of situations and policies in overseas economies and
the effects of fluctuations in the financial and capital markets."
--INCONSISTENT WITH DATA
The government's decision to keep the wording "economic recovery" isn't
consistent with Japan's composite index of business conditions, which decreased
by 2.7 points from December to 97.9 points in January.
The index carries weight in government decisions as to whether the economy
is growing or has gone into recession.
The overall assessment of the index was downgraded from the previous
month's "weakening" to "signalling a possible turning point," the middle one of
The same expression was used in November 2014, when a consumption tax hike
was negatively impacting consumer spending, and the phrase suggesting an
economic trend had peaked several months earlier.
The Cabinet Office official said, "The slowing China economy is lowering
(Japan's) exports and weak exports are filtering through to production. But the
GDP showed that both capital investment and private consumption remained solid
and we maintain the assessment of a moderate economic recovery."
The government left its assessment of overseas economy unchanged in March
from the previous month, saying, "The global economy is recovering moderately as
a whole, although some weakness is seen in Asia and Europe."
--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: firstname.lastname@example.org