• Kyodo News


The government maintained its overall economic assessment for the sixth consecutive month Wednesday, saying the economy is “picking up” thanks partly to improvements in housing construction.

The government, however, continued to warn that deflation and severe employment could threaten the nascent recovery.

“Although the economy has been picking up, it is short of autonomous factors and remains in a difficult situation, such as a high unemployment rate,” the Cabinet Office’s latest monthly economic report said.

In the report for January, the government revised upward its assessment of housing construction, saying there are “signs of an upswing lately.”

The report also showed that the government is less concerned about developments in financial markets. It deleted the reference to possible adverse effects of volatile markets on the economy due to recent rises in stock prices and the corrections of the yen from an abrupt surge to a 14-year high seen in late November.

In the December report, the government said attention should be given to downward risks to the economy, such as deflation and financial market developments.

Exports are increasing, mainly to Asia, the latest report said, noting that the Chinese and Indian economies are “recovering” on the back of stimulus measures, and that the trend is likely to continue for the time being.

The government added its economic assessment of India from this month, given the growing influence of the nation’s economy on Japan. Previously, the government assessed the economies of overseas regions and countries by categorizing them into the United States, Europe, China, and other Asian countries.

On other economic components, the government maintained its prior assessments, saying industrial production is picking up and the pace of corporate profit losses has become moderate.

The report also noted that business investment was starting to level off, while weak movements were seen recently.

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