Monthly Economic ReportExecutive Summary( jun 2024 )

(Provisional translation)

(Assessment of the current state of the Japanese economy)

  The Japanese economy is recovering at a moderate pace, although it recently appears to be pausing.

• Private consumption appears to be pausing for picking up.
• Business investment shows movements of picking up.
• Exports appear to be pausing for picking up.
• Industrial production shows movements of picking up recently.
• Corporate profits are improving as a whole.
  Firms' judgments on current business conditions are improving. Some manufacturers are affected by the suspension of production and shipment by some automotive manufacturers.
• The employment situation shows movements of improvement.
• Consumer prices have been rising moderately.

  Concerning short-term prospects, the economy is expected to continue recovering at a moderate pace with the improving employment and income situation, supported by the effects of the policies. However, slowing down of overseas economies is downside risk of the Japanese economy, including the effects of continued high interest rate levels in the U.S. and Europe and the concern about the prospect of the Chinese economy. Also, full attention should be given to price increases, the situation in the Middle East and fluctuations in the financial and capital markets. In addition, full attention should be given to the economic impact of the 2024 Noto Peninsula Earthquake.

(Policy stance)

  Based on the "Basic Policies on Economic and Fiscal Management and Reform 2024: Achieving a Growth-Oriented Economy Driven by Wage Increases and Investment" and other documents, the Government will make effort to achieve wage increases that exceed price increases, and to solve social challenges and improve productivity through public-private investment.

  To this end, the Government will swiftly and steadily implement the “Comprehensive Economic Measures for Completely Overcoming Deflation”, the FY2023 supplementary budget and the FY2024 budget. Moreover, pensioners and small and medium enterprises are facing difficulty in the current price increases, and the Government will take a two-step approach with measures that can be immediately implemented.

  Based on the “Package to Support the Lives and Livelihoods of the Affected People”, reserve funds will be utilized to provide continuous support for the victims of the 2024 Noto Peninsula Earthquake, including the rebuilding of their lives and livelihoods, as well as for the reconstruction of the areas affected by this earthquake.

  The Government expects the Bank of Japan to achieve the price stability target of two percent in a sustainable and stable manner, while confirming the virtuous cycle between wages and prices, by conducting appropriate monetary policy management in light of economic activity, prices and financial conditions.

  The Government and the Bank will continue to work closely together to conduct flexible policy management in response to economic and price developments.

  Through these measures, the Government and the Bank of Japan will completely overcome deflation and achieve transition to a new growth-oriented economic stage.