Japan raised its economic assessment for August on Wednesday for the first time in 15 months, saying downward movements are coming to a halt after a plunge due to the novel coronavirus pandemic.
The Cabinet Office’s coincident index of business conditions rose 1.1 points from July to 79.4 against the 2015 base of 100, up for the third consecutive month, with the office saying the economy is “bottoming out” in the first upgrade of its evaluation since May last year.
For 12 straight months through July, the government had rated the economy as “worsening,” the most pessimistic of its five expressions.
The latest outcome reflected the gradual resumption of economic activity throughout the country since the complete lifting of a state of emergency over the virus in late May.
Under the emergency declared in April, people had been asked to stay at home and nonessential businesses to suspend their operations.
A government official told reporters that significant improvements in exports, especially of cars, as well as in shipments of industrial goods such as steel helped lift the leading figure, which formally met conditions for revising the assessment upward.
Meanwhile, the official said the pace of the recovery in the coincident index was getting slower, compared with growth of 3.9 points in July and 3.2 points in June. The level also remained low, given that the index stood at 94.1 in February when the virus began to spread in Japan.
“A resurgence in the number of new infection cases seen from the end of July through August is considered to have weakened the recovery momentum,” the official said.
The index sank to 71.2 in May, the worst reading since April 2009 when 71.2 was also logged in the aftermath of the 2008 global financial crisis.
The leading index of business conditions, forecasting the situation in the coming months, rose 2.1 points to 88.8 in the reporting month.