Japan’s government’s outlook on the economy has remained unchanged in June, following two revisions over the past three months.

This comes at a time when U.S.-China trade tensions risk affecting the global economy, which could in turn lead the government to build on spending so as to counteract any negative outcome from a planned sales tax hike.

In the June report released Tuesday, the government said: “Japan’s economy is recovering at a moderate pace, while weakness in exports and industrial production continues.”

As Reuters reports, the government’s assessment of the Japanese economy had been revised down in March and May. Meanwhile, the June report had not changed its outlook on exports and output, which remained weak – while capital expenditure grew moderately.

“The weakness in exports was due to China’s economic slowdown and inventory adjustment of information technology-related goods,” an official said.

However, on the other hand, the government updated its outlook on corporate profits for the first time in over two years, revealing that they now stand strongly at a high level.

Furthermore, domestic demand retained its strength and counteracted weaker exports while private consumption escalated, boosting Japan’s recovery.

The first quarter of 2019 saw the world’s third-largest economy grow by an annualised 2.2% as a result of great capital spending, despite trade concerns.


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