The Cabinet Office has decided to downgrade its assessment of the
economy in its June report (due out Monday) for the first time in three
months, noting that exports are showing signs of deterioration and
corporate earnings are being squeezed by higher crude oil and materials
costs, the Nikkei reported. The government said in its March report
that "the economic recovery appears to be pausing." While retaining the
words "recovery" and "pausing," the June report will indicate that the
economic recovery is further decelerating, mainly in the corporate
sector.