Japan raises economy view; recovery intact

TOKYO: Japan’s government on Thursday raised its overall view of the economy for the first time in six months, reflecting a gradual pick-up in private consumption and underscoring its confidence that an export-led recovery is broadening.
The government also raised its view of private consumption — which has been a weak link in the economy — saying that it is picking up gradually.
A government official said a pick-up will be sustained on the back of the improving job market and household incomes, which prompted the upgrade of the overall assessment.
The upgrade came after the Bank of Japan (BoJ) on Friday raised its assessment on private consumption for the first time in six months, describing it as increasingly resilient.
“The economy is experiencing a moderate recovery,” the Cabinet Office said in its monthly economic report for June.
It dropped a previous reference to delayed improvement in some areas, namely consumer spending, from the overall assessment, which is the first upgrade since December.
The BoJ has a slightly rosier view on the economy, which it said has been turning toward a moderate expansion.
An official in the Cabinet Office said the underlying economic recovery was not strong enough to be described as expansion.
The Cabinet Office, which helps coordinate economic policy, raised its view on capital spending — needed for a sustainable economic recovery — for the first time in four months.
Brisk car output and overseas demand for smartphones and IT goods are underpinning capital spending, the official said.
“Business investment is picking up,” the Cabinet Office said in the monthly report.
The office also raised its assessment on housing construction and public investment.
It left unchanged its assessment that exports and output are picking up.
Japan’s economy grew for a fifth consecutive quarter in January-March, led by exports, although wage growth and household spending remain stubbornly weak despite a tightening job market.
The economy is expected to recover moderately, the Cabinet Office said, while sticking to its cautious view on the uncertain global economic outlook and financial market swings. —Reuters