Deflation in Japan is coming to an end and the job situation is improving, according to the latest monthly report from Japan's Cabinet Office released on Thursday. The government kept its assessment of the overall economy unchanged, saying that the economy is picking up steadily and is showing some movements towards recovery.
"Recent price developments indicate that the deflation is ending," the Cabinet Office said in the report. Upwardly revising its assessment of the job situation, the government said "the employment situation is improving."
Last month, the government opined that the employment situation is improving, although conceding that severe aspects remain.
Official figures released last month support the government's view. Data showed that core consumer prices in the country increased at the fastest pace in four and half years in June, while the unemployment rate declined to 3.9 percent, its lowest level since October 2008.
Exports are showing some movements of picking up and industrial production is increasing at a moderate pace, the Cabinet Office said in its monthly report. Private consumption is picking up, it added.
The Cabinet Office also noted that corporate profits are improving, mainly among manufacturers. Business investment is leveling off, while showing some movements of picking up, it said.
Looking ahead, the recovery is expected to resume with higher corporate profits boosting household income and business investment and exports picking. The effects of the recent policy actions are also expected to support the economy's recovery in the near-term.
At the same time, the government maintained that the slowdown of overseas economies still remained a downside risk for Japan.
The economy expanded 0.6 percent quarter-on-quarter in the second quarter of 2013, the preliminary figures from the Cabinet Office showed earlier this week. This comes after a 0.9 percent expansion in the first quarter.
The minutes of the July meeting of Bank of Japan's Policy Board showed that the Board members believed the economy has started to move on a path of moderate recovery.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.