Japanese economy upgraded

 

TOKYO —The Japanese government upgraded its assessment of the economy for the
second straight month in February as a rebound in exports boosts production.

The
new assessment follows the previous governmental view on Japan’s economy that
stated: “Economic movements appear to be pausing.”

However,
while the government signalled that Japan is emerging from its economic lull,
the Cabinet Office noted that downside risks such as rising commodity prices
and sluggish consumption still remained and thus the Japanese economy is yet to
be on a self-sustained recovery path.

The
Cabinet Office raised its view on exports for the first time in 16 months, and
lifted its assessment of industrial production for the second straight month.

Industrial
output in Japan increased 3.3 per cent in December from the previous month and
was forecast to gain 5.7 per cent in January, suggesting Japan is on a positive
recovery track, despite Japan’s gross domestic product falling an annualized
1.1 per cent in the October-December quarter.

In
light of, the office did cut its view on private consumption for the first time
in three months, saying that private consumption is “nearly flat,” in
contrast to the previous month’s assessment stating: “consumption was picking
up despite some areas of weakness.”

Other
potential risks to the economy the Cabinet Office highlighted in its report
were the ever-increasing possibility that demand from major export markets may
decline, the Japanese currency may undergo another prolonged period of
robustness against its major counterparts, which will hamper the nation’s
export-led recovery, and a rise in oil and other commodity prices may also take
its toll.

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