Japanese government maintains economic vision in June with reduced virus risk

The government maintained its view that some sectors of the Japanese economy are experiencing increased weakness in its June monthly report, indicating more optimism on Thursday about the outlook with a reduced risk of the coronavirus pandemic.

The Japanese economy is showing “new” weakness in some components and remains in dire straits due to the pandemic, the Cabinet Office said in the report outlining the overall economic situation, using the same wording as the May report which downgraded the rating for the first time. times in three months.

Looking ahead, the office said the economy is expected to continue to recover as the government promotes the rollout of its vaccine, but warned that special attention should be paid to the impact of the pandemic on economies. national and foreign.

The previous month, he warned of “downside risks” from the spread of the virus. The office failed to refer to these risks for the first time since March.

A government official told reporters this reflected the lifting of the country’s third state of emergency over the virus on Monday in nine prefectures.

Of the nine zones, seven, including Tokyo, have moved to a near-state of emergency, allowing anti-virus measures targeted for specific areas rather than entire prefectures.

Only Okinawa will continue to be under a state of emergency until July 11, as hospitals in the southern prefecture of the island remain strained by an increase in the number of patients infected with the virus.

The latest report also made no reference to the economic impact of the Tokyo Olympics from July 23, with the official saying the big international sporting event is only expected to boost consumption slightly as it will take place without foreign spectators.

As for domestic spectators, Olympic organizers said venues can be filled to 50% of their capacity, up to a maximum of 10,000 people, without alcoholic beverages sold at the venues. They have left open the possibility of hosting the matches behind closed doors if the virus infection situation worsens.

By component, the bureau maintained its assessment for private consumption, saying it “still shows weakness recently, especially in spending on services.” It was revised down in May, modified from the April report that consumer spending had shown “a weak tone recently”.

The report improved its assessment of housing construction for the first time in five months, saying it has shown firmness supported by an increase in rental apartment construction.

Opinions on the other principal components remained unchanged. The bureau said exports “continue to increase moderately”, while evaluating both business investment and industrial production as “picking up”.

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