The Japanese government kept its basic economic assessment unchanged in a monthly report released on October 29. It maintained its views on the overall recovery pace and major sectors. However, it downgraded its outlook on business failures for the first time since January 2023, acknowledging an increase.
The Cabinet Office compiled the October monthly economic report released on October 29, maintaining the basic view that "the Japanese economy is recovering at a moderate pace." This language remains unchanged from the September report. The report also stated, "the effects caused from the U.S. trade policies are seen mainly in the automotive industry."
On private consumption, the government kept its assessment that the sector "shows movements of picking up." Business investment "is picking up moderately," and exports "are almost flat," both unchanged from September.
Meanwhile, the government downgraded its view on business failures for the first time since January 2023, recognizing an increase amid escalating labor shortages mainly in the cargo transportation and construction industries. The September report had described the number of business bankruptcies as almost flat.
This report underscores the moderate recovery trend in the domestic economy while factoring in U.S. trade policy impacts, but it highlights labor market strains as an emerging risk.