Japan govt raises econ view as sales tax hangover fades

TOKYO, July 17 (Reuters): Japan's government raised its assessment of the economy on Thursday because a decline in consumer spending after a sales tax increase is starting to fade due to improving consumer sentiment and a tight labour market.
It was the first time in six months that the government has upgraded its overall assessment.
The government said personal spending was showing signs of recovery, an upgrade from last month, as an increase in the nationwide sales tax to 8 per cent from 5 per cent on April 1 was having only a temporary impact on consumption.
"There are still some weak points, but there are signs that consumption is recovering," the Cabinet Office said in its monthly economic report. "We expect the recovery to continue as the jobs market and wages improve."
Personal consumption accounts for about 60 per cent of the economy.
Sales of electronics and home appliances are recovering, while sales of cars are showing signs of bottoming out, a Cabinet Office official said.
Bank of Japan Governor Haruhiko Kuroda expressed a similar view to the government on Tuesday, when he said he expected strong demand for labour and upward pressure on wages to bolster consumer spending.