Japan government retains its assessment that the economy is recovering moderately in May

There is no change to the assessment from April (which was also the same as in March), as the government notes that “the Japanese economy is recovering moderately, while attention should be given to the effects caused from the situation in the Middle East”.As a reminder, this assessment was changed from February which at the time noted that “the Japanese economy is recovering at a moderate pace, while the effects caused from the US trade policies remain”.For the month of May, there were no changes to the outlook for private consumption (picking up), business investment (picking up), exports (almost flat), industrial production (flat), and employment situation (showing signs of improvement).And as a whole, there isn’t too much of a change with just a minor tweak in the languages for corporate profits and consumer prices.The former retains the view of showing signs of improvement but now negates the mention of being affected by US trade policies and instead focuses on risks from the Middle East. Meanwhile, the latter still reaffirms that prices are rising moderately but omits the word ‘recently’ from the end of that view.It’s a subtle shift but reaffirms the view that they are seeing upside risks to inflation and that those risks warrant even more attention than they did in April.As for policy outlook, they just added a short passage about deploying more “strategic fiscal policies” while retaining a more “responsible and proactive” approach in handling public finances.That is in part to try and reassure the public and investors of Japan’s fiscal situation, especially after added concerns following their latest budget announcement here.
This article was written by Justin Low at investinglive.com.

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