The economy may be already leveling off as gross domestic product grew an annualized real 0.4 percent in the April-June quarter, a senior government official said Monday.
“The economy may be said to have already entered the stage of leveling off,” said Keisuke Tsumura, a parliamentary secretary at the Cabinet Office.
But the gloomy view was soon rejected by the minister in charge.
Economy and fiscal policy minister Satoshi Arai told a separate news conference the GDP figures show the economy has continued to pick up steadily, but caution is needed over downside risks, including uncertainty surrounding the U.S. and European economies and financial markets.
“I think the latest data show the economy continued to steadily pick up in the April-June quarter,” Arai said, adding he expects the economy to head toward a self-sustaining recovery.
“It is not right to say that the economy has already entered a temporary lull,” he said. The government will decide whether it needs to take additional economic measures after checking revised GDP data for the April-June quarter, due out in September, he added.
Arai also said the government and the Bank of Japan need to work together to curb the yen’s recent sharp appreciation, following remarks last week by Prime Minister Naoto Kan, BOJ Gov. Masaaki Shirakawa and other authorities aimed at dispelling market concerns after the dollar’s plunge to a 15-year low in the upper ¥84 range.
He said the government will closely monitor whether the yen’s surge against other major currencies will become a “big obstacle” for the economic recovery.
But Arai added he has not heard that the prime minister and the BOJ chief will meet over the currency issue anytime soon, after weekend news reports saying they would likely huddle over the matter.
The government said in the morning GDP grew a real 0.1 percent in the latest reporting quarter from the previous quarter for the third straight quarter of expansion, but at a much slower pace than the previous quarter’s 1.1 percent.
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