The Japanese government cut its assessment of the economy for the second straight month in September, as a slowdown in key export markets weighed on domestic demand and production.
In its monthly economic report released Friday, the government said the economic recovery appears to be pausing due to a deceleration of the world economy.
It was the first time the assessment was cut for two or more consecutive months since a five-month decline from October 2008 to February 2009.
The government expects the Japanese economy to resume its recovery as conditions improve overseas, as well as with the continued support of reconstruction-related spending after the March 2011 earthquake and tsunami. But it cited further slowing abroad as well as fluctuations in financial and commercial markets amid the ongoing euro-zone crisis as potential downside risks.
The report comes after a host of recent data, including weak industrial production and exports, suggest Japan's export-led recovery is struggling amid the worldwide slump.
A Cabinet Office official briefing reporters on the report said that the slowdown in Europe had also depressed growth in Asia, particularly in China, pulling down Japanese exports.
Weak exports caused the government to downgrade its view of production to weakening from flat for the second consecutive month. The report cautioned that anemic export demand as well as production adjustment in the auto industry would continue to weigh on output.
The government also lowered its assessment of consumer spending in the report for the second straight month to almost flat, though some weakness has been seen lately, from in a gradually rising trend amid falling retail and car sales.
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