– Japan Sees Firmer U.S. Economic Recovery Due To Stimulus Package
By Max Sato
(MaceNews) – Japan’s government Thursday maintained its view that the domestic economy is moving toward a recovery despite a resurgence of coronavirus infections in many regions, according to its monthly report released by the Cabinet Office.
The government said, “signs of a pickup remain in place, although there is weakness in some areas,” leaving the overview unchanged from March, when it partially lifted its call for restrictions on economic activity amid fears that relaxing those measures could trigger another wave of the pandemic.
In February, after extending a state of emergency for some regions for another month, government ministers downgraded their overall assessment for the first time in 10 months by adding the part about the “weakness.”
As for overseas economies, the government Thursday said they are “picking up” amid severe conditions during the pandemic, an upward revision from its previous assessment that they showed “signs of a pickup.”
It also upgraded its view on the U.S. economic recovery for the first time in five months, thanks to the Biden administration’s $1.9 trillion economic stimulus package. In recent months, Japan had revised up its assessments of India, South Korea, Indonesia, China and Taiwan.
On the near-term outlook, the government largely repeated its previous statement, saying, “The pickup in the economy is expected to continue, supported by the effects of the policies and improvement in overseas economies.”
But it also warned about a “higher downside risk” posed by the spread of coronavirus infections on domestic and global growth.
Key points from the monthly report:
The government revised up its view on business investment for the first time in two months after the April 1 release of the Bank of Japan’s quarterly Tankan business survey for March that showed companies generally planned higher capex spending for fiscal 2021 ending in March 2022.
It revised down its assessment on public investment for the first time in 13 months in light of slower pace of implementation of public works spending in recent months, although the level of the investment remains high.
Other details:
The government’s assessment of key components of the economy in the monthly economic report:
* Private consumption “has been in a weak tone” (unchanged; last upgraded in October 2020; last downgraded in February 2021).
* Business investment is “picking up” vs. “showing signs of a pickup” (the first upgrade since February 2021; last downgraded in November 2020).
* Housing construction is “flat on the whole” (unchanged; upgraded in January 2021; downgraded in September 2019).
* Exports are “increasing at a slower pace” (unchanged; upgraded in December 2020; downgraded in March 2021).
* Industrial production is “picking up” (unchanged; upgraded in November 2020; downgraded in April 2020).
* Corporate profits are “picking up as a whole while weakness is seen among non-manufacturers” due to the impact of COVID-19. (unchanged; upgraded in February 2021; downgraded in April 2020).
* Business sentiment is “showing signs of a pickup, although tough conditions remain in some areas” (unchanged; upgraded in March 2021; downgraded in January 2021).
* Employment conditions are improving with some soft spots (unchanged; upgraded in September 2020; downgraded in May 2020).
* Consumer prices are flat (unchanged; downgraded in March 2020).