TOKYO (MNI) – Japan’s government on Friday revised down its overall
economic assessment for the second straight month, saying the global
slowdown is pushing back a sustained recovery.
“The economic recovery appears to be pausing due to deceleration of
the world economy,” it said in its monthly economic report for
September.
Last month it said, “The Japanese economy is on its way to a
recovery at a moderate pace partly due to reconstruction demand, while
some signs of weakness are evident.”
The government has not used the term “paused” since January 2011.
The government also revised down its outlook but it is still
pinning its hopes on a rebound in global demand.
“The economy will pause for the time being but is expected to
resume its path toward recovery with an improvement of overseas
economies and continuing reconstruction demand,” it said.
The government revised down its assessment of two major economic
components.
Industrial production, a coincident indicator of the economy, “is
in an weak tone.”
The latest data showed that industrial output fell 1.2% on the
month in July, much weaker than the 4.5% rise projected by manufacturers
as demand for semiconductors plunged more significantly than expected.
Shipments of electronic parts and devices tumbled 7.7% in July,
marking the first decline in three months after rising 3.1% in June.
The government also revised down its view on consumption, the
largest component of the economy, saying, “Private consumption is nearly
flat while some weakness is seen lately.”
Slowing automobile sales are dampening consumption as the
government’s subsidies for buying low-emission vehicles are expected to
be terminated this month.
Moreover, the government has revised down its assessment on capital
investment, the second largest component of the economy, saying,
“Business investment as a whole is picking up slowly while some weak
spots are seen recently.
Capex by non-manufacturers fell 2.0% on quarter in April-June,
posting the second straight drop, after falling 5.1% in Q1, due to
sluggish spending by electric power and real estate companies, according
to Cabinet Office data.
tokyo@marketnews.com
** MNI Tokyo Newsroom: 81-3-6860-4823 **
[TOPICS: M$J$$$,M$A$$$,MAJDS$,MGJ$$$]
