Japan cuts forecasts over fiscal challenges

TOKYO - Japan's government revised down its forecasts for economic growth and consumer prices for the current and next fiscal years as natural disasters and weakening export demand weighed on the economy, the Cabinet Office said on Tuesday.

The forecast cuts follow disappointing data on quarterly gross domestic product and machinery orders, highlighting the growing downside risks posed by a trade conflict between the United States and China.

The government will use the forecasts to finalize the state budget for the next fiscal year starting in April, which could present policymakers with a host of challenges as they prepare to raise the nationwide sales tax.