Japan’s government said on Wednesday that the economy is in moderate recovery, but remains cautious due to potential global economic risks and financial market volatility. The monthly economic report highlighted strong corporate profits for April to June and solid wage recovery, though typhoon-related transport disruptions affected travel demand. Private consumption showed signs of an uptick, with gradual recovery in consumer spending on services like dining out, but the travel industry suffered. The government raised its bankruptcy outlook for the first time since March 2021 as bankruptcy filings slowed. A slowing pace in the rise of the corporate goods price index was noted, following a slowdown in annual wholesale inflation in August. The Bank of Japan is expected to keep monetary policy steady this week but may signal forthcoming rate hikes as it begins to normalise policy after years of aggressive stimulus.
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