Japan cuts economy assessment as global slowdown bites

The Slowdown venue in NoDo, Omaha (Photo credit: Wikipedia)

 Japan's government cut its assessment for the export-reliant economy on Tuesday for the first time since October 2011, as slowing global growth weighed on exports and factory output, and threatened recovery prospects.

Deceleration in the United States and China, on top of Europe's debt crisis, caused the downgrade, the government said, warning that further global slowdown and sharp market swings posed risks to the world's third-largest economy.

The assessment underscores policymakers' worry that fresh stimulus measures could be needed, as exports may struggle to recover before the economy feels the full effects around the year-end from rebuilding following last year's earthquake and tsunami.

"The economy is moderately recovering helped by reconstruction demand, while some weak movements were seen recently," the Cabinet Office said in its monthly report, adding that the recovery will be affected by a global slowdown.

While the previous monthly report had also seen the economy recovering moderately helped by reconstruction demand, it had merely noted that there were difficulties, whereas the latest report's allusion to "weak movements" struck a more negative note. ... Continue to read.

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