Japan on Tuesday left its monthly economic assessment unchanged for April, reflecting resilient consumption and corporate spending, although weakening overseas demand is clouding the outlook.
In the April economic report, the government said the economy is "picking up moderately," although some weaknesses are seen, using the same expression for the fourth straight month. It lifted its view on imports for the first time in nine months, now saying that they are "flat" rather than weakening, as described in March.
The Cabinet Office acknowledged that slowing overseas economies caused by monetary tightening pose downside risks to the Japanese economy, adding that inflation and fluctuations in financial markets warrant "full attention."
The government also retained its views on other key components of the economy. Private consumption, which accounts for more than half of Japan's gross domestic product, is "picking up moderately" despite inflation accelerating at the fastest pace in decades.
Household sentiment is improving, helped by the waning impact of the COVID-19 pandemic and rising pay. The outcome of annual wage negotiations between labor unions and management is expected to be the best in about three decades.
Capital spending is "picking up," the report said. The prices of goods traded between companies are steady, a change from the previous month's expression that they were rising at a slower pace.
The monthly report also pointed out that exports are weakening, a worrying sign for the export-reliant Japanese economy. The assessment came despite a recovery in demand from China and a boon from a sooner-than-expected revival in inbound tourism, which is counted as exports in Japan's trade data.
Concerns have grown about the strength of U.S. economic growth. The Federal Reserve has been raising interest rates to cool demand and fight soaring inflation, while the collapse of regional banks there has rattled financial markets.
Still, the government report raised its view on China, a major trading partner for Japan, for two consecutive months, underscoring strength in production, exports and private consumption.
The global economy continues to "pick up moderately despite weakness in some regions," the report said, referring to South Korea, Taiwan, Germany and Britain.