TOKYO (MNI) – Japan’s government on Friday revised down its overall
economic assessment for the fourth straight month on weak consumer
spending and business investment, which was confirmed in the latest GDP
data for the July-September quarter.

But at the same time, government officials see some bright spots in
global demand and domestic car production.

“The economy has shown weakness recently due to deceleration of the
world economy” it said in its monthly economic report for November.

Last month it said, “The economy has been in a weak tone recently
due to deceleration of the world economy, although some components are
still solid.”

The government revised down its assessment of consumer spending,
the largest component of the economy, saying, “Private consumption shows
weakness.”

Private consumption as measured in GDP fell a preliminary 0.5% on
quarter in July-September, posting the largest drop since -1.6% in Q1 of
2011, as the government ended its subsidies for buying low-emission
vehicles in September.

It also revised down its assessment of capital investment, saying,
“Business investment is in a weak tone.”

Capital investment in Q3 GDP plunged 3.2% q/q, the sharpest decline
since -5.5% in Q2 of 2009.

Data released on Monday showed that Japan’s economy contracted 0.9%
on quarter in July-September, slumping after a 0.1% growth (revised down
from +0.2%) in April-June and marking the first contraction in three
quarters.

On an annualized basis, GDP fell 3.5%, down sharply from a revised
0.3% rise (+0.7% in the previous report) in the second quarter of 2012.

Meanwhile, the government also sees a silver lining in economic
activity in coming months.

It revised up its assessment of the global economy for the first
time in 21 months, thanks to more job creation in the U.S.and higher
growth in Chinese exports.

In addition, government surveys of carmakers suggest that Japanese
automobile production is expected to rebound in December or January,
Minoru Masujima, director of macroeconomic analysis at the Cabinet
Office, told reporters.

Output of transportation vehicles including automobiles, the key to
a recovery in industrial production, is projected to rise 2.4% on the
month in October and gain 3.7% in November, after falling for five
months in a row through September, according to the Ministry of Economy,
Trade and Industry.

–email: skodama@mni-news.com
–email: msato@mni-news.com

[TOPICS: MAJDS$,M$A$$$,M$J$$$]