TOKYO (Dispatches) – Japanese government on Friday downgraded its assessment of the economy, adding to signs that China’s economic slowdown amid its trade conflict with the United States has been weighing on production and exports.
"The Japanese economy is recovering at a moderate pace while weakness in exports and industrial production continues,” the Cabinet Office said in a monthly report.
It maintained its view that the economy is seeing a moderate recovery on improving employment conditions and robust corporate earnings, but slightly changed its wording on exports and production from the previous report. It had said last month that "weakness is seen recently in exports and industrial production in some sectors.”
The downgrading followed a lowered assessment in March, when the Cabinet Office cut the headline assessment for the first time in three years.
Looking ahead, the latest report warned that "further attention should be given” to the fallout for the world economy from the U.S.-China trade war.
Earlier this month, the Cabinet Office said in a different assessment that the world’s third-largest economy has been "worsening.” The expression was employed for the first time in more than six years.
The wording, used in assessing the coincident index of business conditions for March, could be seen as signaling that the economy is heading into recession.
The coincident index of business conditions for March fell 0.9 point from the previous month to 99.6 against the 2015 base of 100.