TOKYO—Japan needs to closely watch downside economic risks from rapid commodity inflation caused by the war in Ukraine and its disruption to the global energy supplies, the government said in a monthly report on Friday. The world’s third-largest economy has yet to return to pre-pandemic levels as COVID-19 outbreaks and curbs hinder a consumption-led recovery, even before the recent surge in prices. “As uncertainties around the situation in Ukraine loom, downside risks such as rising raw material prices, fluctuations in financial markets, and supply constraints require full attention,” the government said in its monthly report. The report kept its main assessment of the economy unchanged from last month, saying its recovery was in progress although some vulnerabilities remained. One such weakness was the household sector, with the report repeating last month’s assessment of private consumption as having stalled, due to prolonged COVID-19 curbs on face-to-face services. Authorities also said consumer …