Gov't Says Economy Still Harsh But Some Recovery

The Cabinet Office released the monthly economic report (May) yesterday. It says in summary: under deteriorating employment conditions, the Japanese economy is still in a difficult situation. But with inventory adjustment proceeding, stimulus packages and economic conditions overseas picking up, we expect the Japanese economy to hopefully be in the process of recovery. On the other hand, production activity remaining at a low level will make the unemployment rate worse for a while. In addition, we still have concerns regarding the effect of the financial crisis and the direction of the world economy.

The tone of their view was much better than last month.