Japan to Upgrade Economic Assessment: Reports

The government led by the Democratic Party of Japan (DPJ) is set to upgrade its assessment of the economy for the first time in eight months, local media reported on Thursday.

In recent weeks, data in Japan has suggested that the risk of the country sliding back into recession is subsiding, because exports have remained robust, consumer confidence has grown and production has maintained a healthy pace.

Media reported that the government will maintain the view that deflation continues to cause a problem and that the Bank of Japan (BOJ) needs to continue to implement measures to make sure that the situation improves in the future.

The report on the economy, scheduled for release on Monday, will also reaffirm the commitment of both the BOJ and government to working together on measures to keep the economic recovery intact.

For the eight months to February, the government has said that factors such as high unemployment put the economy at risk, despite positive signs. Media reports suggest the new report will suggest that the economic is likely to continue.

On Thursday, Keisuke Tamura, a parliamentary secretary at the Cabinet Office, suggested that GDP figures released earlier in the day had lowered the risk of economic conditions worsening. Data showed the economy expanded an annualized 3.8 percent in the October to December period.

“From now, the self-sustainable power in the economic recovery is the major issue to watch,” he said.

Japan is now in the midst of an economic recovery after suffering a huge downturn in the aftermath of the credit crisis that started in the second half of 2008.

So far, the recovery has been sustained by stimulus measures put in place by the government and the BOJ. Household spending and high unemployment have meant that positive signs from manufacturers and major exporters have not so far filtered down to the general population.