Japan economy improving even as exports slow

30-Oct-2018

Japan’s economy continues to improve amid robust business spending and an uptick in private consumption despite slowing exports, the government said Tuesday.

Exports are “almost flat,” the Cabinet Office said in the October edition of its monthly economic report, a weaker tone than the previous month when it said outgoing products were “pausing recently.”

The downgrade came as demand fell from China for components used in smartphones, and as some firms were shaking off the negative impact of a powerful typhoon that hit the area surrounding Osaka and an earthquake that rocked Hokkaido in September.

Economists say the string of natural disasters could weigh down growth in the July-September quarter following a robust 3.0 percent annualized real expansion in April-June.

The office maintained its headline assessment that Japan’s economy is “recovering at a moderate pace,” saying private consumption, which accounts for more than half of the country’s gross domestic product, is “picking up.”

Business spending is “increasing,” the report said, reflecting rising corporate profits and investment in equipment and software to cover for a shortage of workers.

The office, meanwhile, warned that heightened trade tensions between the United States and China warrant caution.

“Attention should be given to the effects of situations concerning trade issues on the world economy, the uncertainty in overseas economies and the effects of fluctuations in financial and capital markets,” it said.

Source: THE MAINICHI