Japan lowers exports view, says economy shows weakness in March report

A ship is pictured on an almost empty port in the Dotonbori amusement district of Osaka

TOKYO (Reuters) – Japan’s government in March cut its view on exports for the first time in 10 months, and said overall economic conditions were still showing weakness due to the coronavirus pandemic.

Authorities also urged attention to how the spread of COVID-19 is affecting the Japanese and other economies, days after the end of a state of emergency in the capital, Tokyo, and three neighbouring prefectures.

“The economy shows some weakness, though it continued picking up amid severe conditions due to the coronavirus,” the government said in its economic report for March.

Among key economic elements, the government slashed its assessment of exports, a key driver of Japan’s trade-reliant economy, for the first time since May, saying they were increasing at a slower pace.

Behind the downgrade was a slowdown in car exports, which showed signs of flattening out after manufacturers front-loaded shipments ahead of an expected recovery from the health crisis, especially in the United States, a government official said.

Analysts expect Japan’s economy to shrink sharply in the current quarter as the emergency that ended on Sunday weighed on business activity and consumer spending.

But they are also anticipating the decline will be followed by a rebound of an annualised 5.3% in the second-quarter, a Reuters poll showed last month, as economic activity is expected to pick up following the easing of lockdown measures.

Authorities upgraded their view on bankruptcies and of firms’ assessment of business conditions, saying they were showing signs of picking up, though severe spots remained.

(Reporting by Daniel Leussink; Editing by Clarence Fernandez)

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