Gov’t ups views on production, capex; economic overview unchanged

December 21, 2017

Tokyo- The Japanese government kept its basic economic assessment unchanged in its monthly report released on Thursday, while raising its views on industrial output and corporate capital expenditures and, by contrast, showing a bleaker picture of housing construction.

"The Japanese economy is on a moderate recovery," the government said in the December report, using this overview for the seventh straight month.

The government revised up its assessments on industrial production and corporate capital spending, for the first time in 12 months and six months, respectively, saying that they are "increasing moderately." Last month, it said production and business fixed investment are "picking up."

The Bank of Japan's "tankan" quarterly survey for December, released last week, showed that fiscal 2017 capital spending by all surveyed companies, including large manufacturers and nonmanufacturers, is expected to increase 7.5 percent from the previous year, stronger than the 6.7 percent rise estimated in the previous September tankan.

According to recent revised gross domestic product data for July-September, corporate capital spending reached 86.9 trillion yen in nominal terms, topping a peak level marked before the collapse of US investment bank Lehman Brothers in September 2008, a Cabinet Office official noted.

Meanwhile, the government said that housing construction is on a weak note recently, lowering the assessment for the first time in 10 months. In November, it said housing construction is flat.

The December government report said that imports are showing signs of pickup, reflecting growing shipments from Asia.

Private consumption "is picking up moderately," the government said, keeping its assessment unchanged.

Looking ahead, the latest report said that the Japanese economy is expected to recover moderately, backed by the effects of government policy measures amid continued improvements in the employment and income situation. Jiji Press