Japan Govt Report Calls Attention to Impacts of Heavy Rain, Trade Tensions

Tokyo, July 19 (Jiji Press)--The Japanese government, in its monthly report Thursday, kept its overall assessment of the domestic economy for the seventh straight month in July but called for vigilance against possible impacts of the recent rain disaster in Japan and the escalating trade friction between the United States and China. "The Japanese economy is recovering at a moderate pace," it said in the report, submitted by the Cabinet Office to the day's meeting of economic ministers. Looking ahead, the report said that the economy is expected to "continue recovering," backed by policy measures and improving employment and income situations. However, it warned of envisaged fallout from the torrential rain in western Japan through the last weekend and the ongoing trade dispute between the two economic giants in the world. The rain disaster has already damaged manufacturing plants, logistics networks and social infrastructure, such as railroads and expressways, the government agency pointed out. Situations should be understood from various aspects, including activities of farmers and small businesses, it said. "We'll properly analyze the impact of the downpours on a wide range of fields," a Cabinet Office official said. As for the U.S.-China tariff war, the official said the Japanese economy "could be indirectly affected by impacts on supply chains and investment, as well as on the global economy." Elsewhere in the July report, the government lowered its view on private-sector business confidence for the first time in two years, noting that the confidence leveled off. Last month, it said business sentiment was seen picking up. The downward revision mainly reflected deterioration in sentiment among large companies, especially manufacturers, as shown in the Bank of Japan's latest "tankan" quarterly survey released earlier this month. "Companies have been unable to reflect in prices sufficiently higher costs, amid increases in crude oil prices and labor shortages," the official said. Meanwhile, the government upgraded its view on housing construction for the first time since June 2016, to "almost flat" from "a weak note" in the previous report in terms of housing starts. The government left intact its assessments of other sectors including personal consumption, capital spending and production. END