TOKYO: Japan cut its view on overall economy for first time in 11 months in January, as China’s Covid-19 infections and slowdown in global demand for tech and semiconductors hurt exports, especially to Asia.

Government expects economy, world’s third largest will pick up going forward but Japan needs to pay full attention to impact from China’s spreading infections after it dropped stringent pandemic curbs, report said.

Economic downgrade followed Bank of Japan’s move last week when it slashed its economic growth projections for next two fiscal years amid worries that slowing global demand will weigh on Japan’s export-reliant economy.

“Economy is recovering moderately but some weakness is seen recently,” according to latest report by Cabinet Office. Authorities slashed its assessment on exports for first time since November 2011, while it also cut its view on imports for first time in three months. January report said both exports and imports are “Weakening recently” compared with its previous view of “Almost flat” last month. “China’s coronavirus rebound could affect Japan’s exports and production and such a possibility has become clearer than last month,” said an official at the Cabinet Office.

Meanwhile, Cabinet Office maintained its assessment of Japan’s domestic demand, saying private consumption was “Picking up moderately” in latest report. But government said recovery in industrial production was stalling, unchanged from its view in December.

Published in The Daily National Courier, January, 26 2023

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