Japan's exports boom speed space of economic recovery
By Tomoko Hosaka |
May 21, 2010, Friday
|
Print Edition
Print Edition
JAPAN'S economic growth accelerated in the first quarter as robust exports spurred companies and consumers to boost spending.
Real gross domestic product grew at an annual pace of 4.9 percent in the January-March period, the government said yesterday.
The figure marks the fourth straight quarter of expansion but misses the Kyodo news agency's average market forecast for annualized growth of 5.6 percent.
The results reflect how Japan is benefiting from the recovering global economy, which has led to robust export demand, particularly from China and elsewhere in Asia. Companies have responded by boosting production and capital investments.
Government stimulus measures also lifted consumer demand for big-ticket items like household appliances. But the recovery of private consumption appears to be broadening to items beyond those covered by government incentives. The benefits of export growth may finally be trickling down to households, economists say.
"Rising exports may have started to underpin consumption driven by increasing production, growth in overtime, and other elements related to income," said Masayuki Kichikawa, chief economist at Bank of America Merrill Lynch in Tokyo, before the numbers were released.
In its semiannual outlook report last month, the central bank predicted a brighter future for Japan this year, crediting exports for fueling production, stock market gains and better corporate profits. That should eventually lead to more jobs, higher wages and stronger domestic demand, it said.
Japanese companies across the board are reporting big improvements in their annual earnings reports.
In the January-March period, exports jumped 6.9 percent from the previous quarter, according to the Cabinet Office's preliminary report. Consumer spending, which accounts for roughly 60 percent of GDP, rose 0.3 percent, while corporate investments increased 1 percent.
Real gross domestic product grew at an annual pace of 4.9 percent in the January-March period, the government said yesterday.
The figure marks the fourth straight quarter of expansion but misses the Kyodo news agency's average market forecast for annualized growth of 5.6 percent.
The results reflect how Japan is benefiting from the recovering global economy, which has led to robust export demand, particularly from China and elsewhere in Asia. Companies have responded by boosting production and capital investments.
Government stimulus measures also lifted consumer demand for big-ticket items like household appliances. But the recovery of private consumption appears to be broadening to items beyond those covered by government incentives. The benefits of export growth may finally be trickling down to households, economists say.
"Rising exports may have started to underpin consumption driven by increasing production, growth in overtime, and other elements related to income," said Masayuki Kichikawa, chief economist at Bank of America Merrill Lynch in Tokyo, before the numbers were released.
In its semiannual outlook report last month, the central bank predicted a brighter future for Japan this year, crediting exports for fueling production, stock market gains and better corporate profits. That should eventually lead to more jobs, higher wages and stronger domestic demand, it said.
Japanese companies across the board are reporting big improvements in their annual earnings reports.
In the January-March period, exports jumped 6.9 percent from the previous quarter, according to the Cabinet Office's preliminary report. Consumer spending, which accounts for roughly 60 percent of GDP, rose 0.3 percent, while corporate investments increased 1 percent.
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