TOKYO (AP) -- Japan cut its overall economic assessment for the first time in three months on Monday, saying that exports, output and corporate profits are all weakening.
''The economic recovery appears to be pausing (and) weak movements are seen recently,'' the Cabinet Office said in its monthly economic report for June. The government mentioned only the pause in the economic recovery a month earlier.
The government's increasing pessimism toward corporate performance is a gloomy sign for Japan's economy, which has recovered in recent years mainly due to the robust business sector. A slowdown in the U.S. economy is leading to a decrease in Japanese and Asian exports to the American market, weighing on companies' sales.
The recent surge in energy and raw material prices is also eroding business profits by crimping margins.
Japan's government cut its evaluation of exports and industrial production, saying that both have had ''a weak tone recently,'' as well as downgrading its view on corporate profits.
The Ministry of Finance last week said that Japanese companies' business investment, profits and sales all declined on year during the January-March quarter.
A government official briefing reporters Monday said that corporate capital expenditure trends need to be watched closely.
''Once the U.S economy picks up, which we expect to happen later this year, Japan's economic growth will gain steam as exports should start rising again,'' he said.