August 11, 2009

Japanese economy shows recovery signs

The Japanese government, noting upturns in exports, production and consumption, maintained its assessment the economy is showing recovery signs.

The closely watched monthly assessment by the Cabinet Office had been upgraded for three months in a row through July. The latest report, however, expressed caution over rising unemployment, Kyodo News reported.

Japan's jobless rate rose 0.2 percent to 5.4 percent in June, the highest in six years.

"The economy has been showing movements of picking up recently while in a difficult situation,'' the report said.

Exports and industrial output ''are picking up'' while private consumption has been showing ''movements of picking up recently," the report said. However, it also said corporate profits and capital spending have declined ''very substantially'' and employment conditions are ''worsening rapidly.''

The report said further recovery is still expected because of inventory cuts, the impact of stimulus policies and recoveries in other major economies.

Japan's current account surplus in June expanded for the first time in 16 months, jumping 144.4 percent year-on-year to $11.86 billion, due largely to a steep fall in imports.

The trade surplus in goods and services rose for the first time in 13 months to $5 billion in June.