MNI POLICY: Japan Govt Keeps Econ View; Trims Output View

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

unchanged from the previous month, saying the Japanese economy "is recovering at

a moderate pace," for the 14th straight month.

     However, the government lowered its assessment of industrial production for

the first time since October 2015 and that for corporate profits for the first

time since June 2016.

     The government's latest report said industrial production is increasing

moderately, "while weakness can be seen in some areas." Previously, the

government said that industrial production is increasing moderately.

     Th report added that overseas orders and shipments are slowing with regard

to electronic parts and devices.

     An official at the Cabinet Office said that the slowing Chinese economy is

gradually affecting Japan's economy.

     The government also said that any improvement in corporate profits "appears

to be pausing, although they remain at a high level." The government previously

said simply "Corporate profits are improving." Current profits by the listed

companies for the October-December fell 14.6% on year.

     --OVERSEAS GROWTH SLOWING

     Following the recent weak economic developments overseas, the government

lowered its assessment of the global economy from the previous month for the

second straight month.

     "The global economy is recovering moderately as a whole, although some

weakness is seen," the latest report said.

     Previously, the government said, "The global economy is recovering

moderately."

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

saying, "the economy is expected to continue recovering, supported by the

effects of policies, while the employment and income situation continues to

improve."

     However, the government warned that attention must be paid to effects from

global trade disputes, China, overseas economies and geo-politics, along with

the effects of fluctuations in the financial and capital markets."

     Japan's economy posted the first growth in two quarters in the

October-December period, up 0.3% q/q, or an annualized +1.4%, thanks to higher

private consumption and capital investment.

     The data came in largely in line with the median economist forecast for

growth of 0.3% q/q, although slightly outpacing the annualized forecast of

+1.2%. The growth in the fourth quarter followed a Q3 drop of 0.7% Q/Q, or -2.6%

annualized.

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

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