In the latest sign of the economic toll wrought by last month's disaster in Japan, on Wednesday the government in Tokyo lowered its assessment of the Japanese economy for the first time in six months.
The economy is expected to start to recover from the severe earthquake-induced downturn later this year, the cabinet office said in its monthly economic report for April. But for now, exports, private consumption, corporate profits and the job market remain under pressure.
“Weakness will continue for a while”, the cabinet office said in a statement. The assessment echoed that of the Japanese central bank, which last week said the economy was “under strong downward pressure.
The twin disasters in turn triggered a crisis at the Fukushima Daiichi nuclear power station, which has been leaking radiation, as well as power shortfalls that have hampered daily life and business.
Apart from the direct material damage wrought by the quake and tsunami on the country's northeast, which the government has estimated could reach ¥25 trillion, or about $300 billion, the disaster has also caused considerable disruption to the flow of spare parts and components to manufacturers in Japan and beyond.
The yen slipped broadly while the euro edged up towards a 15-month high against the dollar on Wednesday as a bout of global risk reduction abated and investors sought currencies promising higher yield. The euro was up 0.1% at $1.5, having earlier hit $1.5 on EBS trading platform.
Against the yen, the euro was up 0.7% on the day at 121.95 yen.