Japanese Government Maintains Upbeat View of Economy

The government on Monday maintained its upbeat assessment of Japan’s economy in its monthly report for March released two weeks before a consumption tax hike, but warned that the escalating turmoil in Ukraine has blurred the global economic outlook.

Prime Minister Shinzo Abe’s administration also downgraded its views on the U.S. and Chinese economies, indicating concern that a possible slowdown in the world’s two largest economies may hamper Japan’s attempt to emerge from nearly two decades of deflation.

“The Japanese economy is recovering at a moderate pace,” the Cabinet Office said in its latest monthly economic report, adding, “A last-minute rise in demand before a consumption tax increase is intensifying.”

Tokyo upgraded its assessments of industrial output and imports for the first time in eight months and three months, respectively, given that domestic demand has been growing ahead of the 3-percentage-point tax hike to 8 percent in April.

“Industrial production is increasing with a last-minute rise in demand before a consumption tax increase,” and “imports have been increasing recently,” the government said.

But the Cabinet Office revised downward its view on housing construction for the first time in four months, saying growth “has lost momentum” as demand for real estate — which expanded late last year prior to the tax hike — is already abating.

via Kitco

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza