Japan Says Economy Recovering, but Flags Risks from Trump Trade Policies 

Pedestrians walk along a sidewalk past the Bank of Japan (BoJ) headquarters complex in central Tokyo on March 19, 2025. (AFP)
Pedestrians walk along a sidewalk past the Bank of Japan (BoJ) headquarters complex in central Tokyo on March 19, 2025. (AFP)
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Japan Says Economy Recovering, but Flags Risks from Trump Trade Policies 

Pedestrians walk along a sidewalk past the Bank of Japan (BoJ) headquarters complex in central Tokyo on March 19, 2025. (AFP)
Pedestrians walk along a sidewalk past the Bank of Japan (BoJ) headquarters complex in central Tokyo on March 19, 2025. (AFP)

Japan's government stuck with its cautiously optimistic outlook for the economy US President Donald Trump's trade policies could dampen global growth and higher inflation could hurt consumer spending.

The government maintained its view on the world's fourth-largest economy, saying it is "recovering moderately" in its monthly report for March, citing strong corporate earnings and wage increases which policymakers hope will boost consumption.

"There are US trade policies which could have direct and indirect impact on Japan, so we highlighted them as risks to the economy," said an official at the Cabinet Office.

Trump's wide-ranging tariff actions and pledges including automobiles, steel and aluminium have spurred worries about the global economy. His policies have ignited trade wars with key commercial partners such as China, Canada, Mexico and Europe.

Referring to Japan's potential trade exposure to those economies, the Cabinet Office report said intermediate good exports including electronic devices account for 60% of Japan's goods exports to China.

The ratio of intermediate goods such as auto parts in the nation's goods exports to Mexico accounts for 60%, while those to Canada account for nearly 50%, the report said.

Still, the government retained its assessment on exports, saying they picked up recently for March as Japan's shipments to Asia were on the rise.

Higher prices were also risks to the economy as Japan's nationwide overall consumer price index rose 4.0% in January, the highest in two years, boosted by fresh food prices.

"It is necessary to pay close attention to the impact on consumer spending from rising prices which dampens consumer sentiment," the official said.

The Cabinet Office raised its view on corporate profits for the first time since September 2023, saying they were "improving".

Private consumption, which accounts for more than half of the economy, was picking up, and capital spending was also recovering, according to the report.



US Economy Shrinks 0.3% in 1st Quarter as Trump Says 'Be Patient'

President Donald Trump speaks during a cabinet meeting at the White House, Wednesday, April 30, 2025, in Washington. (AP Photo/Evan Vucci)
President Donald Trump speaks during a cabinet meeting at the White House, Wednesday, April 30, 2025, in Washington. (AP Photo/Evan Vucci)
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US Economy Shrinks 0.3% in 1st Quarter as Trump Says 'Be Patient'

President Donald Trump speaks during a cabinet meeting at the White House, Wednesday, April 30, 2025, in Washington. (AP Photo/Evan Vucci)
President Donald Trump speaks during a cabinet meeting at the White House, Wednesday, April 30, 2025, in Washington. (AP Photo/Evan Vucci)

US President Donald Trump said on Wednesday that Americans should be patient in the face of a first quarter economic contraction, arguing that his tariffs would eventually lead to a boom in the US economy.

The economy shrank 0.3% from January through March, first drop in three years. It was slowed by a surge in imports as companies in the United States tried to bring in foreign goods before Trump imposed massive tariffs.
The January-March expansion was the slowest in almost three years and was down from 2.4% in the last three months of 2024. Imports shaved 5 percentage points off first-quarter growth. Consumer spending also slowed sharply.
Trump inherited a solid economy that had grown steadily despite high interest rates imposed by the Federal Reserve to fight inflation. His trade policies — including 145% tariffs on China — have paralyzed businesses and threatened to raise prices and hurt consumers.

Republican Trump blamed his Democratic predecessor, Joe Biden, for the poor showing.

"This is Biden’s Stock Market, not Trump’s," he said. "Our Country will boom, but we have to get rid of the Biden 'Overhang.'

Trump added: "This will take a while, has NOTHING TO DO WITH TARIFFS, only that he left us with bad numbers, but when the boom begins, it will be like no other. BE PATIENT!!!"