Japan govt ups economic outlook, 1st time in 3 mths

(For more stories on the Japanese economy, click [ID:nECONJP])

* Govt ups outlook on strong exports, effects of stimulus

* Govt still cautious over Europe, market fluctuations

* Govt rolling out major policies before July 11 election

* Govt repeats pledge to work with BOJ to end deflation

By Kaori Kaneko

TOKYO, June 18 (BestGrowthStock) – Japan’s government upgraded its
economic assessment for the first time in three months on Friday
as rising exports supported corporate expenditure and as stimulus
measures boosted consumer spending.

The government also repeated it will work with the Bank of
Japan to beat deflation in its report, but added that this was
its top priority. It also said it expects the central bank to
deliver utmost efforts to end deflation.

“Placing top priority on casting off deflation, the
government will work as one with the Bank of Japan to launch
vigorous and comprehensive policy efforts,” the report said.

In its June assessment, the government said the economy is
steadily recovering and the groundwork is being laid for a
self-sustaining recovery. Last month, it had said the economy was
recovering but was still fragile.

It also raised its outlook on capital expenditure for the
first time since March, saying a recovery in machinery orders
pointed to a bottoming out in such spending.

“The economy is being supported by the effects of policy
measures and exports,” said Keisuke Tsumura, a parliamentary
secretary of the Cabinet Office.

“We can see a self-sustaining recovery taking shape, but it
will take time to achieve this.”

The government announced on Friday an economic growth
strategy to boost growth by tapping new areas of demand to end
deflation.

Japan’s ruling Democratic Party also appealed to voters this
week with a pledge to rein in the country’s huge debt in a
manifesto for an upper house election on July 11, and Prime
Minister Naoto Kan said doubling the sale tax to 10 percent is
one option. [ID:nTKC005861]

Next Tuesday, the government is to release a fiscal plan to
tackle the country’s debt and bring its budget deficit under
control.

In the June report, the government kept its cautious stance
about the potential fallout from a possible slowdown in overseas
economies, especially in Europe, and from fluctuations in
financial and capital markets.

The government’s assessment of the economy was roughly in
line with that of the Bank of Japan, which said earlier this week
that the economy is starting to recover moderately.

The central bank this week detailed a new loan scheme aimed
at beating deflation over the longer term, saying it would
provide up to 3 trillion yen ($33 billion) to commercial banks so
that money can be directed towards industries with growth
potential. [ID:nTOE65E036]

Stock Market Money

(Reporting by Kaori Kaneko; Editing by Edwina Gibbs)

Japan govt ups economic outlook, 1st time in 3 mths