Japan’s government reaffirmed its moderate economic recovery outlook in its November report while cautioning about potential risks from the U.S. President-elect Donald Trump’s proposed trade policies, including tariffs on imports from Mexico, Canada, and China. These measures, alongside global financial fluctuations and risks like rising international interest rates and China’s cooling real estate market, could impact Japan’s economy, officials warned. Trump has promised that he would impose a 25% tariff on all products from Mexico and Canada, and an additional 10% tariff on goods from China.
The report highlighted stable private consumption, supported by wage growth, bonuses, and temporary tax cuts, as a key driver of recovery. The government has increased the assessment of imports, but lowered the assessment of public investment. Meanwhile, the assessment of domestic corporate goods prices has been revised to "gradually rising recently" and consumer prices to "rising recently," reflecting increases in rice, raw material costs due to a weak yen and logistic expenses because of labor shortage.
Japan's economy grew by 0.9% per annum in Q3, slower than the previous quarter, as weak capital spending offset an unexpected boost in consumption.