MNI: Japan Govt Keeps Economic View; Cuts Corporate Profits

Japan’s government left its overall economic assessment unchanged in August for a second straight month but lowered its view on corporate profits for the first time since December 2024, citing the impact of U.S. tariffs, the Cabinet Office said Wednesday.

“The Japanese economy is recovering at a moderate pace, while the effects caused from the U.S. trade policies and so on are seen in some areas,” the government said. 

Corporate profits, previously assessed as improving, were now seen as pausing amid those effects.

The government upgraded its assessment of public investment for the first time since July 2024, while cutting its view on housing investment for the first time since September 2023. Assessments of capital investment, exports and private consumption were left unchanged.

The assessment on overseas economies was tweaked, with authorities noting the fading boost from front-loaded demand ahead of tariffs and slower global recovery momentum due to its reaction.

Looking ahead, the government repeated that improvements in employment and income, along with policy support, should sustain a moderate recovery, though risks from U.S. trade policies are increasing. 

It also warned that continued price rises could dampen private consumption by eroding sentiment, while fluctuations in financial and capital markets remained a concern.