Business / Economy

Cabinet Office sees economy ‘recovering moderately’ in April

Kyodo

Japan’s economy is recovering moderately, with a pick-up in domestic and overseas demand, the government said Monday in a monthly report for April.

The Cabinet Office described the economy as “recovering at a moderate pace” for the fourth consecutive month. It retained its existing views on all key components of the economy, from private consumption and business investment to exports.

Cold weather conditions and higher fresh food prices in early 2018 apparently hurt consumer sentiment but the latest economic report said private consumption was “picking up.”

Exports were also “picking up,” while industrial output and business investment were “increasing moderately,” the report said.

Economists expect companies will increase investment as global economic growth is expected to remain solid. But fears of a trade war between the United States and China, and of its spillover effects, have unnerved investors around the world.

“It’s a risk factor so we will watch it closely,” an official with the Cabinet Office said.

A sharp rise in the yen would sap companies’ appetite for investment and cuts into exporters’ profits made overseas in yen terms.

The report also said attention should be given to uncertainty in overseas economies and fluctuations in financial markets.