Japan’s government downgraded its assessment of export performance for the second consecutive month in October on slowing shipments to Asia — suggesting external demand may now contribute less to Japan’s growth than initially anticipated.
The government left its overall assessment unchanged, saying the economy is set to recover at a moderate rate as high corporate profits fuel capital expenditure, which then spurs labor demand.
Domestic demand, boosted by increasing public works and consumer spending, has largely driven Japan’s recovery from recession last year, but signs of weakening exports may mean Japan having to rely even more on domestic demand to continue growing.
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