TOKYO, Oct 12: Japanese corporate profits and consumer spending are picking up, the government said in a monthly report on Wednesday in which it maintained its assessment that the economy is in a moderate recovery.

“The economy is recovering at a moderate pace,” the government said in its October report.

The headline statement took out September’s reference to improving business and household conditions, but the Cabinet Office said the change was simply to reflect confidence that the better conditions would continue.

The only other change in the report was a slight tweaking in the view of overall business conditions, which was altered to say they were “improving” rather than “recovering”.

Economic data since the government’s last monthly report has been upbeat.

Earlier this month, the Bank of Japan’s tankan survey showed business confidence improved in the July-September quarter, although the results were weaker than forecast by economists.

Exports are also picking up after months of weak growth. In volume terms, exports rose 2.0 per cent in August year-on-year after falling 0.8 per cent in July.

Particularly encouraging was a pick-up in exports to Asia, an official at the Cabinet Office said.

“Exports to Asia, especially China, had been weak for a while so the latest figures may mean the risk of weak exports is abating,” he said.

The report reiterated that consumer spending was increasing moderately and manufacturing output was flat.

On the outlook, the report repeated the government’s concerns on oil prices, saying they should be monitored for their effects on both domestic and overseas economies.

Japan is one of the most energy-efficient economies in the world, but government officials are worried that high oil prices could drag down growth in the United States and China, and in turn hurt demand for Japanese exports.—Reuters