MNI POLICY: Japan Keeps Econ View; Cuts Imports, China Outlook

--Downgrades View On Bankruptcies For First Time In Almost 5 Years

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

largely unchanged from the previous month, saying, "the Japanese economy is

recovering at a moderate pace, while increased weakness mainly among

manufacturers is continuing, as exports remain in a weak tone." There was also a

warning that the coronavirus outbreak could impact the global economy.

     But the government downgraded its assessment of imports for the first since

January 2019 and on bankruptcies for the first since July 2015.

     "Imports are weakening recently," the government said, having previously

noted they were "largely unchanged."

     The government also said "bankruptcy is increasing recently", a change from

the previous view that they were "largely flat."

     The assessment of other items, such as private consumption, capital

investment, exports and production, was left unchanged.

     "Private consumption is recovering." "Production continues weakening."

"Exports are weakening," the government said.

     --CHINA WARNING

     The outlook lowered its assessment of the Chinese economy, saying, "the

economy continues weakening moderately. The coronavirus is affecting economic

activity", the first downward revision since November 2019.

     As for the near-term outlook, the government maintained its optimistic

view, saying, "Weakness remains for the time being, but the economy is expected

to continue recovering, supported by the effects of the policies, while

employment and income situation is improving." However, the government warned on

it, saying, "However, full attention should be given to effects of the Novel

Coronavirus on the Japanese and overseas economies."

     Japan's economy contracted for the first time in five quarters in Q4, down

1.6% q/q, or an annualized -6.3%. Growth was weighed by weak demand in the

private sector following a string of natural disasters and the October 1 sales

tax hike, preliminary GDP data released by the Cabinet Office on Monday showed.

     It was the sharpest contraction since Q2 2014, when GDP fell an annualized

-7.4% after a previous sales tax hike.

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

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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