The government in its monthly report released in mid-April downgraded its basic assessment of the Japanese economy for the first time in six months. It said the March 11 catastrophe is causing downward pressure on exports, production and consumption.

Although there is a view that the economy will start to pick up around July, partly assisted by increased demand linked to reconstruction projects, this may be too optimistic.

The March 11 earthquake and tsunami devastated infrastructure and manufacturing facilities in northeastern Japan and disrupted nationwide supply chains of goods.