Japan confident of ending deflation, talks down corporate tax cut

TOKYO - In its monthly economic report for August, Japan’s Cabinet has expressed confidence that the economy no longer facing chronic price declines. CPI inflation turned positive in June for the first time in a year, rising to 0.2% y/y.  Despite a slightly weaker-than-expected Q2 GDP outturn (2.6% saar), the Cabinet judged that the economy is, “picking up steadily and shows some movements on the way to recovery”, evidenced by rising exports, private consumption and industrial production. The Cabinet also expressed confidence that improving corporate earnings will help boost business investment, which contracted in Q2.