MNI: Japan Govt Keeps Economic View; Ups Spending, Capex

Japan’s government slightly tweaked its economic assessment in September, upgrading views on private consumption and capital investment for the first time in over a year, though leaving its overall judgment largely unchanged, the Cabinet Office said Monday.

The government said the economy “is recovering at a moderate pace,” though the impact of U.S. trade policies is being felt, particularly in the automobile industry.

Private consumption was upgraded for the first time since August 2024, with officials noting signs of improvement in consumer sentiment. Capital investment was raised for the first time since March 2024, after Q2 GDP showed strong capex.

Business investment was described as “picking up moderately,” a slight upgrade from the previous view. Assessments of corporate profits and the corporate goods price index were adjusted in wording but not direction, while views on exports, production, and overseas economies were unchanged.

The Cabinet Office said the pace of recovery is moderating, with standstills in some regions and lingering uncertainty over front-loaded demand ahead of tariffs.

Looking ahead, the government repeated that employment gains, income growth, and policy measures should support a moderate recovery, but warned that downside risks are increasing from U.S. trade policies. It also cited the drag from persistent price rises on consumption, as well as potential volatility in financial and capital markets.