TOKYO, Sept 14: The Japanese government on Friday downgraded its view on business investment for the first time in 30 months but left its assessment of the economy unchanged in September.

“The economy is recovering, while some weaknesses are seen recently,” the government said in its latest monthly report.

“As for short-term prospects, the economic recovery is expected to continue, supported by domestic private demand, as high corporate profits feed into the household sector,” the Cabinet Office said.

But the government warned of a possible risk from US economic conditions, saying “attention should be paid to effects of developments in the US economy and changes in oil prices.” The government lowered its assessment of business investment to “generally increasing while weak movements are seen recently,” from “increasing” in the previous report.

An official from the Cabinet Office said the decline in capital spending of non-financial companies in the second quarter was the main reason for the downward revision, but stressed that the weak figures may be temporary.

Earlier this week, the government said Japan’s economy had contracted 0.3 per cent in the three months to June from the previous quarter as firms cut spending on new factories and equipment.—AFP