Japan Upgrades Economic View

The Japanese government raised its assessment of the economy in January for the first time in seven months due to rising consumer spending, an encouraging sign that inflation could start to pick up this year, Reuters reported. “Japan’s economy is gradually recovering,” the cabinet office said in its monthly economic report on Friday. That marked an upgrade from December, when the office said the economy was on a recovery path. The government also raised its assessment of consumer spending for the first time since June after retail sales, household spending, and new car sales gained momentum toward the end of 2017. Consumer spending is “recovering”, which is an upgrade from the phrase “gradual recovery” used in last month’s report. The assessment increases the chance that the government will declare an end to deflation, which would amount to a declaration of victory for Prime Minister Shinzo Abe’s ambitious campaign to reflate the economy. “The difference between previous recoveries and the current recovery is that right now both the corporate sector and the household sector are steadily improving,” said the economy minister, Toshimitsu Motegi.