There was no change in the assessment compared to April (which was also the same as in March), the government noted “The Japanese economy is recovering moderately, with the need to pay attention to the effects resulting from the situation in the Middle East.”.
As a reminder, this rating has been changed from February which indicated this at the time “The Japanese economy is recovering at a moderate pace, while the effects of US trade policies remain.”.
For May, there were no changes in the outlook for private consumption (recovery), business investment (recovery), exports (almost flat), industrial production (flat), and the employment situation (showing signs of improvement).
Overall, there is not much change with just a slight tweak in language to drive corporate profits and consumer prices.
The former maintains his view, which shows signs of improvement, but now denies mentioning his influence on US trade policies and instead focuses on risks coming from the Middle East. Meanwhile, the latter still reiterates that prices are rising moderately but deletes the word “recently” from the end of this opinion.
It’s a subtle shift but it reaffirms the view that they see upside risks to inflation and that those risks deserve more attention than they did in April.
As for the policy outlook, they have just added a short paragraph about deploying more “strategic fiscal policies” while maintaining a more “responsible and proactive” approach to public finances.
This is partly due to an attempt to reassure the public and investors about Japan’s financial situation, especially after the additional concerns following the recent budget announcement. here.
