TOKYO (Reuters) - The Japanese government stuck to its moderately upbeat view on the economy in November, its monthly economic report showed on Tuesday, saying it remained on a recovery path helped by consumer spending and business investment.
“Japan’s economy continues to recover moderately as a trend,” the Cabinet Office said in the report, maintaining that assessment for a sixth consecutive month.
The report is the first since the government announced this month that the economy had grown for a seventh straight quarter in July-September - its longest expansion in 16 years - although private consumption had suffered a rare decline.
But the government said in Tuesday’s report that private consumption was “picking up moderately”, unchanged from the wording it used last month, with the consumer confidence index hovering at four-year highs.
The government maintained its assessment that capital expenditure was “picking up”, supported by machinery orders and an increase in spending on construction work.
It also kept intact its view that exports and industrial output were “picking up” and were expected to continue doing so on the back of solid overseas demand.
The government maintained its assessment that consumer prices remained flat, but said “changes in the move towards an escape from deflation can be seen”, citing factors including Japan’s deep labor shortage and record corporate profits.
Still, it noted that service prices were weak when compared with other countries as Japanese wage increases remained modest.
Economy Minister Toshimitsu Motegi told reporters there was no change to the government’s position that it would judge an eventual deflation exit looking at prices and confirming there would be no relapse, adding that it would aim to vanquish deflation through wage rises and productivity improvements.
The report comes ahead of a slew of October data due this week that will provide an initial economic report card for the current quarter.
Retail sales and household spending are likely to have slipped last month, hurt by adverse weather including two typhoons, but industrial production is expected to have rebounded and consumer inflation is seen ticking higher.
The government on Dec. 8 will also report revised gross domestic product figures for the July-September quarter.
The world’s third-largest economy expanded at a 1.4 percent annualized rate during the period, preliminary data showed two weeks ago, after growing 2.6 percent in the prior quarter.
Reporting by Chris Gallagher; Editing by Kim Coghill and Richard Borsuk