Japan government to downgrade economic assessment in November: sources

TOKYO Wed Nov 14, 2012 1:07pm IST

A security guard walks out from the Bank of Japan headquarters in Tokyo October 30, 2012. REUTERS/Yuriko Nakao

A security guard walks out from the Bank of Japan headquarters in Tokyo October 30, 2012.

Credit: Reuters/Yuriko Nakao

Related Topics

TOKYO (Reuters) - Japan will downgrade its assessment of the economy in a monthly report due at the end of the week, government sources told Reuters on Wednesday, as the global economic slowdown pushes the country to the brink of recession.

That would mark the fourth consecutive month of downgrades, the longest since the aftermath of the collapse of U.S. investment bank Lehman Brothers.

The weakening outlook increases the pressure on the government and the Bank of Japan to bolster the economy and could make some lawmakers reluctant to follow through with a plan to raise the sales tax next year.

The government is scheduled to release its monthly assessment of the economy on November 16.

Last month, the government said the economy was weak but showing signs of bottoming out.

Declining exports and a drop-off in consumer spending following the expiration of subsidies on energy-efficient cars are the main reasons the government is considering a downgrade, the Nikkei newspaper reported earlier on Wednesday without citing sources.

The government has said that it will compile some stimulus measures by the end of this month, but the worst public debt burden among major economies limits the government's ability to pump-prime the economy.

The BOJ eased monetary policy for the second straight month in October as slowing global demand and fallout from a territorial row with China weighs on Japan's exports.

Japan's economy shrank in the September quarter for the first time since last year, adding to signs that slowing global growth and tensions with China are nudging the world's third-largest economy towards recession.

(Reporting by Stanley White; Editing by Chris Gallagher and Eric Meijer)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Markets

REUTERS SHOWCASE

Segway in India

Segway in India

Segway’s India business pegs hope on tech-savvy Modi  Full Article 

Power Outage

Power Outage

Mumbai hit by power cuts  Full Article 

Commodities

Commodities

Gold imports, premiums to jump on festive demand - top refiner  Full Article 

Economic Worries

Economic Worries

Pakistan's promises to IMF in doubt as protests sap economy   Full Article 

Islamic Finance

Islamic Finance

Basel III deposit challenge looms over Islamic banks   Full Article 

Antitrust Probes

Antitrust Probes

U.S. business lobby says concerned China antitrust probes unfair.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage