MNI POLICY: Japan Govt Keeps Economic View Unchanged

Japan's government left its main economic assessment unchanged on the previous month, the Cabinet Office released its monthly economic report.

"The Japanese economy shows weakness in some components, although it is still picking up" but remains a severe situation due to the Novel Coronavirus." the report said.

The government lowered its assessment on exports, noting they are increasing "at a slower pace recently" as overseas demand for autos slows. The downward revision is the first since May 2020. A senior Cabinet Office official said that he is worried about production adjustments that may follow a shortage of semiconductors.

Japanese chipmaker Renesas Electronics said on Sunday production may take up to a month to resume at a fire-damaged main factory in Hitachinaka City, but it may take over three months for supply chains return to normal.

The government upgraded its assessment on corporate sentiment and bankruptcies and it largely left its assessment of other components unchanged.

The government mainly retained its near-term outlook, saying the economy is expected to pick up, supported by policies and the improved overseas economies while the domestic situation will improve as restrictions are limited.

However, the report warned that full attention should be given to the any change in infection rates that would "affect the domestic and foreign economy."

It also said, "Also attention should be given to the effects of fluctuations in financial and capital markets."