Tokyo, Aug. 26 (Jiji Press)–The Japanese government kept its basic economic assessment unchanged in a monthly report released on Thursday.
The Japanese economy shows “further” weakness in some components, although it continues “picking up,” while the situation remains severe due to the COVID-19 epidemic, the Cabinet Office said in the August report, submitted to a meeting of economic ministers.
The government made the same assessment for the fourth month in a row.
In the August report, the government upgraded its assessment on corporate profits for the first time in six months.
“Corporate profits are picking up, although some weaknesses remain in nonmanufacturers due to the influence of” the coronavirus crisis, the government said.
In the July report, it said that such profits were “picking up as a whole, while weakness is seen in nonmanufacturers.”
While listed companies in the nonmanufacturing sector, overall, saw their ordinary profits rise year on year for April-June, the level of such profits have not returned to pre-pandemic levels in some industry sectors such as the transportation sector, a Cabinet Office official observed.
The government slightly altered its wording on private consumption, saying that such consumption “shows weakness further, especially in service spending.”
In the July report, the government said that private consumption “shows weakness further recently, especially in service spending.”
The government kept unchanged its views on business investment, business sentiment and the employment situation.
It also maintained its assessments on exports and industrial production, saying that exports “continue to increase moderately” and production “is picking up.”
The official, however, warned, “We will need to pay attention to the situation on shortages of components due to the spread of the coronavirus in Southeast Asia,” as some Japanese automakers have decided to halt or cut production recently.
Looking ahead, the government said that the Japanese economy is “expected to show movements of picking up,” supported by policy measures and COVID-19 precautions.
But the latest report called for attention “to the further increase in downside risks due to the spread of” the coronavirus.
The wording was different from the July report, which said that attention should be given to “the movements of infections.”