MNI: Japan Govt Keeps Economic View; Lowers Imports

Japan’s government left its overall economic assessment unchanged for the third consecutive month but lowered its view on imports for the first time since February 2025, the Cabinet Office said on Wednesday.

Assessments of other components, including exports, capital investment, production, and private consumption, remained unchanged. The government also adjusted its view on corporate goods prices without specifying an upward or downward revision.

“The Japanese economy is recovering at a moderate pace, while the effects from U.S. trade policies are seen mainly in the automobile industry,” the government said. 

It added that “imports are largely flat,” revising the previous view that they showed signs of recovery. Corporate goods prices “are rising moderately,” compared with the earlier assessment that they were unchanged.

Other aspects were maintained, such as “Business investment is picking up moderately,” “Exports are almost flat,” “Industrial production is flat,” and “Private consumption shows movements of picking up.”

On the near-term outlook, the government said improvements in employment and income, along with policy effects, are expected to support a moderate recovery. 

However, it warned that U.S. trade policies and continued price increases could pose downside risks to the economy. The wording on “a downturn in consumer sentiment” was deleted, reflecting a recovery in sentiment.

The government also noted that attention should be paid to fluctuations in financial and capital markets. Regarding overseas economies, it said, “While standstill is observed in some regions, the moderate recovery of overseas economies continues, though uncertainties from trade policy remain.” 

References to “the impact of the reaction to front-loaded demand” were removed, as these effects largely peaked in the  April-June period.