MNI POLICY: Japan Govt Keeps Econ View, Cuts Capex, Exports

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

largely unchanged from the previous month Thursday, with the economy worsening

rapidly in an extremely severe situation.

     "The Japanese economy is worsening rapidly in an extremely severe

situation, due to the Novel Coronavirus," the latest report said, little changed

from the April wording.

     In April, the government used the wording "worse" in describing economic

climate, for the first in almost 11 years.

     --CUTS EXPORTS, CAPEX, LABOR MARKET

     The government also lowered its assessment for capital investment, exports

and labor market situation, noting business investment is "in a weak tone

recently," the latest report said, revised from "largely flat" last month.

     The latest report also said exports are decreasing "rapidly" due to the

influence of the infectious disease globally. In April, the government said that

exports have decreased recently.

     The May report said that employment situation shows some weak movements

"further" due to the influence of the infectious disease, revised lower for a

third straight month.

     In April, the government said, "the employment situation has seen some weak

movement lately, due to the influence of the infectious disease." it said.

     --KEEPS CAUTIOUS VIEW

     As for the near-term outlook, the government maintained its cautious view,

saying that an extremely severe situation is expected to remain due to the

influence of the infectious disease "for the time being, although the level of

socio-economic activities with will be resumed gradually taking measures to

prevent the spread of infectious disease."

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

in the financial and capital markets."

     Prime Minister Shinzo Abe on Monday lifted the coronavirus state of

emergency in Tokyo and four other prefectures, ending seven weeks of economic

restrictions and ushering in an uncertain "new normal."

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

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