Japan Upgrades Economy for 1st Time in 17 Months Despite Omicron

(Bloomberg) -- Japan’s government raised its monthly view of the economy for the first time since the summer of 2020, in a sign of confidence in the recovery even amid risks from the omicron variant of the coronavirus. 

In its report for December, the Cabinet Office said the economy has picked up recently as the severe conditions caused by the pandemic gradually ease. By individual components, the government raised its view of consumption, business confidence and the jobs market.

The report underscores how Japan has so far managed to avoid the fast spread of omicron seen in the U.S. and the U.K. In the U.S., the variant accounted for 73% of new cases last week, while Japan had confirmed fewer than 70 omicron cases in total as of last weekend.

The cabinet office said attention should be given to the new variant, but still sees the economy picking up in the short term. Supportive government policies and progress in the country’s return to a semblance of normal life should help, it said. 

Japan’s Kishida Confirms Record Fiscal Firepower to Aid Recovery

Japan is expected to rebound this quarter after a summer wave of Covid-19 triggered another state of emergency, dragging on consumption. Since then, restrictions have been lifted and Prime Minister Fumio Kishida unveiled a larger than expected stimulus package to shore up the economy.

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