Japan’s monthly report keeps economic outlook steady, warns of weak inflation

Japan’s monthly report held economic outlook stable, while warning of weak consumer prices to continue in the near term. The report revealed doubts over the policymakers’ three-year effort to stabilize inflation.

According to the Japan's Cabinet Office government monthly economic report, consumer prices rose at a timid pace in June, compared to the previous month's report that said CPI's rise was gradual. 

Further, the report also cites rising wages and high corporate profits for saying that the economy is recovering moderately, and that capital spending is picking up. It notes that weakness still persists in the economy as private consumption remains nearly flat, consumer confidence at a standstill, and exports almost steady.

"Japan's consumer prices are rising at a slower pace," the Cabinet Office said in its monthly economic report on Friday, while maintaining that the economy is recovering at a moderate pace.

The assessment comes immediately a day after the BoJ banked upon keeping interest rate steady, cutting its view on inflation. The central bank also refrained from offering additional monetary stimulus despite a weak global economy and anemic inflation.

While the government said the change in assessment was not a downgrade, it could fan more concerns that the BOJ will have difficulty reaching its 2 percent price target by March 2018. However, the Japanese government seemed more pessimistic than the previous month, citing gradual rise in consumer prices, Reuters reported.