TOKYO – Japan’s government on Thursday upgraded its key economic assessment for the first time in four months, citing a recovery in private consumption, as the effects of the coronavirus pandemic wane.
“The Japanese economy shows movements of picking up,” the Cabinet Office said in its monthly report for April, while dropping the expression “some weaknesses are seen” it had used through the previous month.
The recovery has been driven by more spending for traveling and dining out, a government official said, as a COVID-19 quasi-state of emergency, which allows authorities to ask restaurants and bars to close early and stop serving alcohol, was removed across the country in late March.
But the Cabinet Office cautioned that short-term downside risks stemming from rising raw material prices, fluctuations in financial markets and supply-side constraints amid the war in Ukraine remain.
The office also said attention should be given to how the pandemic unfolds from now on.
By component, its view on private consumption was also upgraded for the first time since December. The monthly report said it recently “shows movements of picking up,” compared with its previous expression “pausing for picking up recently.”
The assessment on public investment was upgraded as well as “solid” from “in a weak tone recently, although it is at a high level.” It was the first upward revision since July 2020, according to the office.
All other evaluations were kept unchanged, with the report saying corporate profits are “improving as a whole, although some weaknesses remain in non-manufacturers” and exports are “almost flat.”
Its view on the world economy was retained for the third straight month, describing it as recovering as fewer countries have been seriously affected by the impact of the pandemic.