Japan’s government revised up its expectations on exports, factory production, and employment in its September report. However, it maintains its overall assessment of weak economic growth as the world’s third-largest economy continues to struggle with the COVID-19 pandemic. In the second quarter, Japan saw the deepest economic contraction since the Second World War, but the economy has shown some signals of improvement after the government lifted a nationwide emergency status in late May.
According to the report, exports were picking up in September from August thanks to economic improvement in Japan’s trading partners, which also supported an increase in factory output. The report also estimated a higher number of people in employment, marking the first increase since January 2018. However, the government downgraded its view on consumer spending and business expenditure in the latest report as consumers and businesses remain cautious about making big purchases amid the struggle to fight the pandemic.
Japan’s economy contracted by 28.1% in the April-June quarter, extending downturns in the previous two quarters. Tokyo has unveiled a $2 trillion stimulus package to cushion the shock of the pandemic. Meanwhile, the Bank of Japan has also eased monetary policy further this year, cutting rates to below zero.
