Japan cuts economic assessment on export dip

Source:Reuters Published: 2012-8-28 23:45:03

Japan cut its assessment for the export-reliant economy for the first time in nearly a year as slowing global growth weighed on exports, clouding recovery prospects and adding pressure on the central bank for further stimulus.

Deceleration in the US and China, on top of Europe's debt crisis, caused the downgrade, the government said on Tuesday, warning that further global slowdown and sharp market swings posed risks to the world's third largest economy.

The first such downgrade since October 2011 matches the assessment of private-sector analysts, but is somewhat bleaker than the view of the Bank of Japan, which has said the economy is starting to pick up moderately.

"Looking at both domestic demand and overseas economies, I don't expect the economy to slide back into a recession but I cannot say it will stage a recovery either," said Yasuo Yamamoto, senior economist at Mizuo Research Institute in Tokyo, adding that Japan may enter a soft-patch in the third quarter.

The government assessment underscores concern that fresh stimulus measures could be needed, as exports may struggle to recover before the effect on the economy of spending on rebuilding from last year's earthquake begins to fade.

Reuters

 



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