TOKYO (MNI) – Japan’s government on Friday revised down its overall
economic assessment for the third straight month, saying that growth has
been hit by the global slowdown.
“The economy has been in a weak tone recently due to deceleration
of the world economy, although some components are still solid,” it said
in its monthly economic report for October.
Last month it said, “The economic recovery appears to be pausing
due to deceleration of the world economy.”
Minoru Masujima, director of macroeconomic analysis at the Cabinet
Office, told reporters that it is still uncertain whether the economy
has entered a downward cycle.
The government revised down its assessment of two major economic
components while noting firmness in business investment and government
spending.
Industrial production, a coincident indicator of the economy is
“decreasing,” hit by slower global demand and fading effects of
subsidy-backed car sales, it said. Last month it said output was “in a
weak tone.”
Industrial output for July-September is expected to fall more than
3% from the previous quarter, posting a second straight decline after
falling 2.0% in Q2, according to the latest projection by the Ministry
of Economy, Trade and Industry.
The government cautioned, “Firms’ judgment of current business
conditions shows cautiousness, mainly among manufacturers.”
Business confidence among major manufacturers, a coincident
indicator of the economy, marked the first decline in three quarters in
September and it is projected to show no improvement in December,
according to the Bank of Japan’s Tankan survey.
tkeditorial@marketnews.com
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