Japanese economy has failed to surge amid appreciating values of the yen and lack of economic activity in the country, according to a monthly report released by the Japan Cabinet Office.
The statement displays the grimmest response of the government in the last two years as it said the recovery in the economy was "pausing", and that Japanese exports took a beating due to a dip in global demand.
The report is contradictory to statements released in recent months when it said the economy is "picking up." Rising values of the yen are to blame for the upheaval, according to analysts privy to Japan's economic problems.
The report paid specific attention to shipments to Asia saying the growth has been stalled by the appreciating yen as the Japanese companies become less competitive. It also expressed concerns about the impact of falling exports on the Japanese economy in the long term.
The yen reached a 15-year high this month and was trading at 81.44 yen to the dollar at the close of markets in Tokyo, which is a little lower than the high of 81.27 yen.
The Japanese currency has failed to respond to economic measures announced by the Bank of Japan and exporters are bearing the brunt despite a 5.1 trillion yen, or $63 billion, stimulus package approved by the Japanese Prime Minister Naoto Kan.
As the exports remain weak, the Japanese economy is facing a threat to reenter the phase of recession, a concern that has not been ruled out by the Cabinet Office.
