Business / Economy

Japanese government keeps economic view unchanged, says economy 'recovering at moderate pace'

JIJI

The government kept its basic economic assessment unchanged in its monthly report released on Tuesday.

“The Japanese economy is recovering at a moderate pace while weakness in exports and industrial production continues,” said the monthly economic report for June compiled by the Cabinet Office and submitted to a meeting of relevant economic ministers.

The government has used the same wording for two months in a row and maintained its view that the economy has continued to grow since December 2012, as consumer spending is recovering although production has been weighed down by the protracted U.S.-China trade friction.

While consumer sentiment is on a weak note, the government left its assessment on private consumption unchanged, saying that private consumption is “picking up,” on the back of brisk sales of new automobiles and strong demand for consumer electronics.

Business investment is “on the increase at a moderate pace, while weakness is seen recently in machinery investment,” the report said, keeping its assessment unchanged.

It also left its view on the employment situation intact, saying it is “improving steadily.”

In the report, the government revised up its assessment on corporate profits for the first time in 27 months. “Corporate profits hold firm at a high level,” it said.

“Corporate profits that serve as financial resources for capital investment … are on a firm note mainly in the nonmanufacturing sector and remain at a high level,” an official of the Cabinet Office said.

The government changed its assessment on corporate goods prices, saying they are leveling off. The change came as prices for copper and other nonferrous metals fell, reflecting a drop in demand stemming from a slowdown in the Chinese economy.

It previously said that these prices were rising moderately.

Looking ahead, the report said the Japanese economy “is expected to continue recovering,” supported by policy measures, in line with improvements in employment and income. It called for “further attention” mainly to the effects trade issues have on the global economy and the prospects for the Chinese economy.