Japan's government monthly economic report on Tuesday retained a "mild recovery"
assessment, saying expansion still has room to continue. The May activity index,
due July 7, is expected to show 72 consecutive months of growth; if June and
July readings also indicate expansion, the current cycle would exceed the prior
73-month record. Consumption and trade have underpinned a strong start to the
year, with demand for AI-related products a key support for exports. Household
Spending remains uncertain as inflation erodes purchasing power. Dai-ichi Life
Research Institute chief economist Toshihiro Nagahama, an independent member of
a government economic and fiscal advisory council, said generative-AI investment
and resilient production activity make a near-term recession unlikely.
