Japanese Government Downgrades Economic Assessment

The government on Wednesday downgraded its basic assessment of the Japanese economy, citing weakening consumer and corporate sentiment due to turbulence in global financial markets and slowdown in emerging economies.

The world’s third-largest economy is “on a moderate recovery, while weakness can be seen recently,” the Cabinet Office said in its monthly report, a downward revision from last month when it said weakness was seen only “in some areas.”

That is the first downward revision since October last year.

The Cabinet Office adopted a weaker view as personal consumption failed to rebound after a slump late last year and some manufacturers became more cautious.

The move could affect a government decision on whether to go ahead with a consumption tax hike as planned in April next year, though Prime Minister Shinzo Abe has said it will be implemented unless exceptional circumstances occur such as “a sharp contraction in the global economy.”

Abe is currently convening a series of meetings at his office to hear the opinions of Japanese and international experts to assess the state of the global economy and help him make a judgment on the consumption tax.

“Private consumption is almost flat, while consumer confidence appears to be pausing,” the office said. Last month it said private consumption held “firm as a whole.”

via Mainichi

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.