TOKYO (AFP) – Japan on Friday downgraded its assessment of the economy for the first time in five months, as a string of weak data hammers hopes for a quick recovery following Tokyo’s April sales tax hike.
The monthly report acknowledged spending at home had stalled, throwing into question Tokyo’s plans to hike sales taxes again next year as Prime Minister Shinzo Abe offered a rare acknowledgement that his growth blitz was taking a hit. But the report added that depressed conditions were due partly to poor weather – Japan was inundated with heavy rainfall and a string of typhoons.
“Private consumption appears to be pausing recently,” said the report. “Attention should be given to the downside risks of the Japanese economy such as lengthening of the reaction after a last-minute rise in demand and slowing-down of overseas economies.”
The gloomier assessment came the same day that Abe penned a column in the Wall Street Journal extolling the virtues of his three-pronged policy blitz to resuscitate Japan’s deflation-plagued economy, and saying he would press on with promised reforms.