Japan’s Economy Steadily Rebounds Despite Data Rigging Scandal and Negative Impact on Consumer Spending

The Japanese government released its monthly economic report for June and stated that the Japanese economy is steadily recovering, with indications of growth in industrial production despite potential risks from rising overseas interest rates. Despite a data-rigging scandal in the auto industry, the negative impact on the economy is decreasing, signaling a positive trend.

According to the report, Japan’s economy is expected to rebound this quarter after contracting during the January-March period. However, rising prices of everyday goods are affecting consumer spending. Private consumption and exports are showing signs of slowing down while business investments are increasing, indicating a mixed outlook for domestic demand.

The report noted that public investment was downgraded for the first time in eight months but remains stable. Concerns about inflation, global events such as the situation in the Middle East, and fluctuations in financial markets continue to impact Japan’s recovery at a moderate pace.

The government is closely monitoring the weakness of the yen against the US dollar, which could lead to increased import costs of energy and raw materials, affecting inflation. Despite concerns about high interest rates in the US and Europe, Japan raised its outlook on the global economy for the first time since May 2023, stating that overseas economies are showing signs of improvement.