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.
Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at email@example.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.