JAPAN MORE UPBEAT ON OVERALL ECONOMY

Govt raises view for first time in six months as private consumption picking up gradually

JAPAN’S government yesterday raised its overall view of the economy for the first time in six months, reflecting a gradual pick-up in private consumption and underscoring its confidence that an export-led recovery is broadening.

The government also raised its view of private consumption — which has been a weak link in the economy — saying that it is picking up gradually.

The upgrade came after the Bank of Japan (BoJ) on Friday raised its assessment on private consumption for the first time in six months, describing it as increasingly resilient.

“The economy is experiencing a moderate recovery,” said the Cabinet Office in its monthly economic report for June.

The BoJ has a slightly rosier view on the economy, which it said has been turning toward a moderate expansion.

The Cabinet Office, which helps coordinate economic policy, raised its view on capital spending — which is needed for a sustainable economic recovery — for the first time in four months.

The office also raised its assessment on housing construction and public investment. It left unchanged its assessment that exports and output are picking up.

Meanwhile, BoJ deputy governor Kikuo Iwata yesterday dismissed the need to raise interest rates, stressing that the economy still needed support from “powerful” monetary easing, as the country’s inflation was still distant from the central bank’s two per cent target.

The BoJ must therefore maintain its stimulus programme, even if global long-term interest rates rose on expectations of stronger world economic growth and steady interest rate hikes by the US Federal Reserve, he said. Agencies