Japan sticks to economic assessment in June report

© Reuters. FILE PHOTO: Pedestrians wearing protective masks amid the coronavirus disease (COVID-19) outbreak, make their way in Tokyo, Japan, February 2, 2021. REUTERS/Kim Kyung-Hoon/File Photo

By Daniel Leussink

TOKYO (Reuters) - With about a month to go until Tokyo hosts the Olympic Games, Japan kept its economic assessment for June largely intact, sticking to its view that the economy remained impacted adversely by the coronavirus pandemic.

In a monthly assessment approved by the cabinet on Thursday, the government said full attention should be given to the way infection trends are affecting the domestic and foreign economies.

"The economy shows increased weakness in some parts, though it continued picking up amid severe conditions due to the coronavirus," the government said in the report to describe economic conditions in June.

On key economic elements, authorities stuck to their view of major components - such as exports, output and private consumption -struggled as the health crisis has prompted people to cut back on overall spending.

"Car exports are not doing very well, but those of information-related materials and capital goods used for capital investment overseas are strong," a government official told reporters before the cabinet approved the report.

The official said that output of transport machinery was expected to slow down as manufacturers struggle with the impact of a global chip shortage.

Authorities raised their assessment of housing investment, saying it was firming as a trend, against previously describing it as being flat, due to an improvement in the construction of single-family homes.

Japan's economy likely grew at just 0.5% on an annualised basis this quarter, a Reuters poll showed this month, a much slower pace than a majority of economists expected months ago, as it struggles with the pandemic's impact.

The government will release a preliminary estimate for second-quarter gross domestic product on Aug. 16.