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Positive news for Japan's economy
Source: Agencies |
November 15, 2011, Tuesday
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JAPAN'S economy grew for the first time in four quarters in a comeback from the earthquake and tsunami disaster in March.
The world's third-largest economy expanded at an annualized rate of 6 percent in the third quarter, driven by exports, Japan's Cabinet Office said in a preliminary report yesterday.
The result was in line with market forecasts, including Kyodo News agency's projection of 6.2 percent annualized growth.
"Having something as strong as hoped for is really good news," said Martin Schulz, senior economist at Fujitsu Research Institute in Tokyo. "All parts of the economy were expanding. And this is extremely important because we see a slowdown internationally, which is already hitting exports."
While such a robust rebound is encouraging, it is unlikely to last, according to analysts.
Economic and Fiscal Policy Minister Motohisa Furukawa said: "The situation surrounding our country's economy is becoming tougher as we see the recovery in overseas economies weakening and face the impact of the Thai flood, in addition to the yen's rapid rise."
Economists expect gross domestic product to contract in the last three months of the year before turning moderately positive next year.
Last week, Japan's lower house of parliament approved a 12.1 trillion yen (US$157 billion) extra budget to help fund recovery efforts in Japan's tsunami-battered northeast. The budget includes measures aimed at easing pressure from the yen's recent surge.
Considered a safe haven, the Japanese currency has hit record highs against the dollar this year amid intensifying anxiety about Europe and the US. The climb is particularly painful for exporters.
The new government spending should help offset weaker overseas demand, according to Kyohei Morita, chief economist at Barclays Capital in Tokyo. He said: "We maintain our view that Japan is likely to outpace other advanced economies in 2012."
The International Monetary Fund agrees. It estimates Japan's economy will expand 2.3 percent next year - the strongest growth forecast among the Group of Seven countries, including the US, the UK and Germany.
Japan's latest annualized GDP figure translates to growth of 1.5 percent from the previous quarter, according to the Cabinet Office.
Consumer spending, which accounts for some 60 percent of the economy, climbed 1 percent from the previous quarter. Capital investment by companies rose 1.1 percent. Exports jumped 6.2 percent.
Toyota's production had recovered to pre-tsunami levels by September, earlier than initial estimates.
The world's third-largest economy expanded at an annualized rate of 6 percent in the third quarter, driven by exports, Japan's Cabinet Office said in a preliminary report yesterday.
The result was in line with market forecasts, including Kyodo News agency's projection of 6.2 percent annualized growth.
"Having something as strong as hoped for is really good news," said Martin Schulz, senior economist at Fujitsu Research Institute in Tokyo. "All parts of the economy were expanding. And this is extremely important because we see a slowdown internationally, which is already hitting exports."
While such a robust rebound is encouraging, it is unlikely to last, according to analysts.
Economic and Fiscal Policy Minister Motohisa Furukawa said: "The situation surrounding our country's economy is becoming tougher as we see the recovery in overseas economies weakening and face the impact of the Thai flood, in addition to the yen's rapid rise."
Economists expect gross domestic product to contract in the last three months of the year before turning moderately positive next year.
Last week, Japan's lower house of parliament approved a 12.1 trillion yen (US$157 billion) extra budget to help fund recovery efforts in Japan's tsunami-battered northeast. The budget includes measures aimed at easing pressure from the yen's recent surge.
Considered a safe haven, the Japanese currency has hit record highs against the dollar this year amid intensifying anxiety about Europe and the US. The climb is particularly painful for exporters.
The new government spending should help offset weaker overseas demand, according to Kyohei Morita, chief economist at Barclays Capital in Tokyo. He said: "We maintain our view that Japan is likely to outpace other advanced economies in 2012."
The International Monetary Fund agrees. It estimates Japan's economy will expand 2.3 percent next year - the strongest growth forecast among the Group of Seven countries, including the US, the UK and Germany.
Japan's latest annualized GDP figure translates to growth of 1.5 percent from the previous quarter, according to the Cabinet Office.
Consumer spending, which accounts for some 60 percent of the economy, climbed 1 percent from the previous quarter. Capital investment by companies rose 1.1 percent. Exports jumped 6.2 percent.
Toyota's production had recovered to pre-tsunami levels by September, earlier than initial estimates.
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