The Japanese economy has not yet got out of the severe situation, as the recovery of aggregate demand remains weak. However, activities continue to improve moderately, through the influence of various policy measures, of the Asian economic recovery, and of gradual movements towards the autonomous recovery mainly in the firm sector.
Personal consumption remains broadly flat, as income is sluggish.
Housing investment is decreasing from the high level seen at the beginning of the year, but condominium construction is relatively bullish. The decrease in investment in plant and equipment is coming to an end. Firms, especially those in the manufacturing sector, have become more positive toward investments, and recoveries are spreading. The level of public works is considerably lower than the high level seen a year ago, although the effects of the second supplementary budget, etc. are coming out. Exports, especially those to Asia, are increasing.