Japan raises economic assessment first time in 3 years

• Source: Xinhua
• [09:25 May 26 2009]
• Comments

The cabinet office of Japan on Monday upgraded its overall assessment of the Japanese economy for the first time since February 2006.

In its monthly economic report for May, the office said that though the economy is still in a difficult situation, the pace of deterioration has become moderate.

The judgment on the economy was based on a gradual pickup in external demand and falling corporate inventories, according to the report, which no longer described the economy as "worsening rapidly while in a severe situation."

Though there are signs that the economy is likely to change for the better, it is unwise to be overly optimistic as some downside risks are still there, warned Economic and Fiscal Policy Minister Kaoru Yosano at a press conference.

Yosano's remarks were echoed in the report, which said that the economy remains vulnerable to downside risks as worsening employment conditions could be the next big obstacle to recovery.

While the report indicated that industrial output and exports have improved, the employment situation is severe and worsening rapidly.

According to data released earlier this month, Japan's unemployment rate in March, on a seasonally adjusted bases, reached a four-year high of 4.8 percent.