Business / Economy

Japan's economy maintains moderate recovery for sixth month, government says

Kyodo

Japan’s economy is recovering moderately, supported by pickups in private consumption, capital spending and exports, the government said Tuesday in maintaining its monthly assessment for November.

The expression that the economy is “on a moderate recovery” was used for the sixth straight month, indicating that the current economic expansion cycle — thought to be the second-longest in the postwar era — remains intact.

In the monthly economic report, the Cabinet Office maintained its assessments on all key components of the economy, including industrial output.

The current economic expansion, which began in December 2012, is likely to have entered its 60th month, surpassing the 57-month “Izanagi boom” between 1965 and 1970. The longest economic boom logged in postwar Japan lasted 73 months, between 2002 and 2008.

Despite the recent economic expansion, domestic demand — particularly private consumption, which accounts for nearly 60 percent of the country’s economy — is far from robust, as economists point to lukewarm wage growth.

The Cabinet Office said private consumption is “picking up moderately,” while business investment, industrial output and exports are all “picking up.”

As employment and income conditions are improving, the economy is expected to recover going forward, but attention should be given to uncertainty in overseas economies and fluctuations in financial and capital markets, the report said.

At home there is also uncertainty after a series of revelations about misconduct by Japanese manufacturers, including improper car inspections that led Nissan Motor Co. to at one point suspend production and shipments for the domestic market.

“We will be watching carefully how much of an impact there will be (on the economy) from a longer-term perspective” as a result of the scandals, an official at the Cabinet Office said.

The government maintained its assessment that the global economy has been “moderately recovering,” using the same expression for the eighth consecutive month.