TOKYO – Japan upgraded its view of the economy for the first time in seven months on Friday, citing “some movements towards a pick-up” but warned that the risk of slowing growth is still a major challenge.
“Although the economy appears to be pausing, some movement towards a pick-up can be seen” the Cabinet Office said in its January report, upgrading its view of industrial production, which rose for the first time in six months in November.
“However, the economy remains in a difficult situation,” it added, citing a stagnant employment picture and warning that Japan’s economy ‘could be depressed by a possible slowdown in overseas economies’. Unemployment in November was at 5.1 percent, unchanged from the previous month.
The subtle upgrade from the previous month, when the government only said the economy’s expansion seemed to be “pausing recently”, came as China’s growth and healthier signs of a US recovery helped slow a decline in Japanese exports.
China, a key export market for Japan, on Thursday said its economy grew by a higher-than-expected 9.8 percent in the October-December quarter. A Cabinet Office official said that China’s purchasing subsidies for electronic appliances and automobiles had helped to support production in Japan, but warned of a possible correction when those subsidies end. “Exports are decreasing modestly, and industrial production shows signs that it has begun to stop decreasing,” the report said.
