MNI POLICY: Japan Govt Keeps Econ View Unch; Ups Capex View

Japan's government has left its main economic assessment unchanged for a third straight month, the Cabinet Office said Thursday as it released its monthly economic report, noting "weakness in some components, although it remains in picking up from the severe situation due to the Novel Coronavirus."

The government upgraded its assessment on capital investment, saying that business spending is "picking up." The upward revision is the first time since February. A senior Cabinet Office official said that demand for goods to be used for capital investment is strong. "The rising trend since late last year continues and this is the biggest reason of upgrading the capex assessment," the official said.

The official, however, warned of downside risks to private consumption as Covid infections pick up, indicating a downward revision from the latest assessment "private consumption has been in a weak tone recently."

The Tokyo Metropolitan Governor Yuriko Koike is considering asking the government to introduce a third state of emergency in the wake of the sharp increase of infectious diseases.

The government tweaked its near-term outlook, saying the economy is expected to "show movement towards recovery," supported by the effect of policies and the improvement in overseas economies while taking measures to prevent the spread of Covid.

However, the report warned that full attention should be given to the "further increase in downside risks to the spread of the infectious diseases in Japan and abroad," adding that "attention should be given to the effects of fluctuations in financial and capital markets."