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"The Japanese economy is recovering at a moderate pace, although
it appears to be still pausing in parts," the Cabinet Office
said in its monthly economic report for August, raising the
assessment for the first time since May 2023.
Consumption is picking up as the impact of shipping stoppage at
some automakers is easing, the government said. The increase in
household disposable income, coupled with temporary cuts in
income and resident taxes, also helped consumption.
However, the extreme heat this summer yielded mixed consumption
results, the report said. While demand for air-conditioning,
parasols and ice creamed increased, customer traffic at theme
parks and restaurants declined.
The report also anticipated a fall in import prices, primarily
due to the recent correction in the yen's weak trend.
The government also upgraded its assessment on housing
construction to "almost flat" from "in a weak tone" for the
first time in more than two years, attributing the change to a
halt in the decline of owner-occupied house construction.
Assessments for the remaining sub-sectors, including exports,
remained unchanged.
The report was presented at a meeting attended by relevant
cabinet ministers and Bank of Japan (BOJ) Governor Kazuo Ueda.
Earlier this month, government data showed Japan's economy
expanded by a much faster-than-expected 3.1% annualized rate in
the second quarter. The rebound, after a slump at the start of
the year, was largely attributed to a robust increase in
consumption.
(Reporting by Satoshi Sugiyama; Editing by Jacqueline Wong)
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