Although the Japanese economy has not yet got out of the severe situation, activities continue to improve moderately. In addition to the influence of various policy measures and of the Asian economic recovery, there are movements, mainly in the corporate sector, gradually growing towards autonomous recovery.
Personal consumption remains broadly flat while the decrease in income is coming to an end.
The level of housing investment is stable as a whole with bullish condominium construction. The recovery in investment in plant and equipment has become clear. The level of public works is lower than the high level seen a year ago, although the effects of the second supplementary budget are seen. Exports, especially those to Asia, are increasing. Inventory adjustments have finished, and industrial production continues to gradually increase.