The government on Tuesday maintained its assessment of the Japanese economy as recovering moderately, supported by resilient domestic demand, while it warned of downside risks from slowing Chinese growth and monetary tightening abroad.
The same assessment has been used for the fifth straight month in September. The Cabinet Office upgraded its view on corporate profits for the first time since March 2022, saying they are "improving as a whole." But rising material costs led the view on housing construction to be cut for two months in a row to "weak."
Japan's economy grew for a third straight quarter in April-June, but economists expect the momentum will slow in the current quarter to September.
The government plans to draw up a fresh economic package in October to cushion the blow from inflation to households and businesses.
The Cabinet Office used the same expression that consumer prices are "rising" in the monthly report, though it now says wholesale prices have been "flat" recently, a change from "declining" in August.
The report retained assessments on other key components of the economy. Private consumption and capital investment are both "picking up." Exports, which have aided the recent economic recovery, show "movements of picking up."
China's slower-than-expected economic recovery since the end of its "zero-COVID" policy and troubles in the real estate sector have raised concerns about growth prospects for the global economy.
The Organization for Economic Cooperation and Development recently cut its outlook for 2024, citing sluggish Chinese growth.
In the September report, the Cabinet Office retained its view on the global economy, saying it is "picking up despite weakness in some regions."