Assessment of economy cut for a third month

Kyodo

The government on Friday downgraded its overall assessment of the economy for the third straight month as production weakened further amid the global economic downturn and warned about uncertainties posed by the territorial dispute with China and the eurozone debt crisis.

Japan’s economic activity has displayed “a weak tone recently due to deceleration of the world economy, although some components still show steady movements,” the Cabinet Office said in its monthly report. Last month it said recovery “appears to be pausing.”

This is the first time in more than three years that the overall assessment has been downgraded over three consecutive months. It was lowered over five straight months through February 2009, affected by the global financial turmoil triggered by the September 2008 bankruptcy of Lehman Brothers Holdings Inc.

While speculation is growing among private-sector economists that the domestic economy has entered a recession, economic and fiscal policy minister Seiji Maehara told a news conference that he can’t say anything for certain.