Japan’s government maintained its economic assessment but noted a more pessimistic outlook for exports due to weakening demand from China.
According to the Cabinet Office’s Monthly Economic Report, the Japanese economy is recovering at a “moderate pace,” though it has recently “appeared to be pausing.” The assessment of exports was downgraded from “appearing to be pausing for picking up” to “almost flat,” reflecting the impact of slowing Chinese demand.
In the short term, the economy is expected to continue its moderate recovery, supported by an “improving employment and income situation.” However, several risks threaten this outlook. These include the slowdown in global economies, high-interest rates in the US and Europe, and the “lingering stagnation of the real estate market in China.”
The report also highlighted the need to monitor price increases, geopolitical tensions in the Middle East, and fluctuations in financial and capital markets.
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