TOKYO (MNI) – The Japanese government on Monday left its overall
economic assessment unchanged, saying in its monthly report that the
economy is recovering, but was more cautious in its outlook due to
further slowing of the overseas economies.
“The Japanese economy is on its way to a recovery at a moderate
pace, reflecting reconstruction demand, while difficulties continue to
prevail,” it repeated in its July report.
But the report’s description of the outlook for overseas economies
was more subdued.
“There are widespread concerns about a further slowdown of overseas
economies while a high degree of uncertainty about the prospects for the
Eurozone debt crisis remains,” the report said. “These circumstances,
including negative effects that could stem from sharp fluctuations in
financial markets, are downside risks for the Japanese economy.”
Minoru Masujima, director of macroeconomic analysis at the Cabinet
Office, noted that growth in the Chinese and U.S., economies, which are
Japan’s largest trade partners, has slowed recently.
Chinese grew only 7.6% Y/Y in Q2, the lowest growth rate since Q1
2009 when the world economy had been hit by aftermath of a collapse of
Lehman Brothers. And estimates of U.S. Q2 growth have been revised down
recently to less than 2%, while U.S. nonfarm payrolls rose only 80,000
m/m in June, falling short of 100,000 for the third month in a row.
The Japanese government report left its description on personal
consumption, the largest component of the Japanese economy, unchanged:
“Private consumption is increasing at a moderate pace” thanks to the
government’s subsidies for low emission cars.
Auto sales in Japan rose 40.9% y/y in June, the ninth straight
month of double-digit gains.
But funding for government subsidies for greener cars will be used
up during August, so pullback will be seen as early as September,
Masujima said.
tokyo@marketnews.com
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