Khaberni - The Japanese government said Monday that the Japanese economy is recovering moderately but American trade policies have specifically impacted the automobile industry.
Tokyo has improved its forecasts for private spending and capital expenditure, but warned of potential downside risks to economic prospects from Washington's trade policies.
The Japanese economy grew at a faster pace than expected in the period from April to June, marking the fifth consecutive quarter of growth. However, U.S. tariffs and domestic political uncertainty may complicate the policy-making process ahead of the early October elections to choose a successor for outgoing Prime Minister Shigeru Ishiba.
The Japanese Cabinet Office said in its monthly report today, "The Japanese economy is recovering moderately but the impact of American trade policies is primarily seen in the automobile industry."
The United States agreed to impose a 15% tariff on Japanese imports when Washington and Tokyo reached an agreement in July, which is less than the initially threatened 27.5% on cars and 25% on most other goods. However, the impact is considered to be significant, especially for the automobile industry, because the tariffs are still much higher than the previous rate of 2.5%.
The government raised its assessment in the latest economic report for consumer spending for the first time since August 2024.
The report confirmed that private spending in Japan, which accounts for more than half of the economy, showed "signs of improvement," following the U.S. tariff agreement.
