Turning to domestic demand in Japan, the momentum of recovery in private consumption might temporarily weaken in the latter half of fiscal 2010 as the effects of policy measures gradually wane. Nevertheless, the underlying trend of a recovery is not likely to be interrupted given the continued improvement in the employment and income situation.
Business fixed investment, which has stopped declining, is expected to gradually start picking up, given that machinery orders (private demand, excluding orders of shipbuilding and orders from electric power companies), which are a leading indicator of machinery investment, are expected to have risen in the April–June quarter for the third consecutive quarterly increase.