MNI: Japan Govt Keeps Economic View; Tweaks China Assessment

Japan’s government left its overall economic assessment unchanged for a fourth straight month but downgraded its view on public investment for the first time since November 2024, the Cabinet Office said on Friday.

Assessments of other economic components, including exports, capital investment, production and private consumption, were maintained.

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

On the near-term outlook, it said the improvement in the employment and income situation and the effects of its policies "are expected to support a moderate recovery," while attention should be given to downturn risks as the impact of U.S. trade policies are increasing.

“In addition, the effects of continued price increases on private consumption are also downside risks to the Japanese economy. Also, continued attention should be given to the effects of fluctuations in the financial and capital markets.”

The government also left its assessment of overseas economies unchanged, saying, “while standstill is observed in some regions, the moderate recovery of overseas economies continued. But uncertainties stemming from the trade policy continued.”

However, it revised its assessment of the Chinese economy for the first time since April 2025, citing weak domestic demand.

The Chinese economy is at a standstill, it said, a shift from its previous assessment of, "while the impact of various measures was observed, the economy is standstill.”