Japan's economy has joined France and Germany in emerging from recession as the country's stimulus package gained some traction.
The economy, the world's second-biggest, recorded growth of 0.9pc in the three months to the end of June from the first quarter of the year. If Japan manages to sustain that rate for 12 months, the economy would enjoy expansion of 3.7pc.
The rebound in the economy was fuelled by Japan's key export markets, including China. Japan's neighbour is its biggest export market and saw growth of 7.9pc in the second quarter. Exports contributed 1.6pc to the quarter's growth, helping to offset other headwinds.
Japanese consumer confidence has also been buoyed by the 25 trillion yen stimulus package thrown at the economy by Prime Minister Taro Asa.
Despite Japan's technical emergence from recession, stock markets focused on the prospect that a robust recovery is unlikely. Tokyo's benchmark Nikkei 225 was down almost 3pc in late afternoon trading. Asian stock markets were also reacting to weak consumer confidence numbers released in the US last Friday.
“Growth was supported by stimulus packages and exports but it’s hard to believe they’ll both keep lifting the economy at this pace,” Takahide Kiuchi, chief economist at Nomura told Bloomberg. “We’re over the worst but Japan is in no condition to achieve a sustainable recovery.”
However, the second quarter's growth does bring to an end four straight quarters of expansion and may provide a political boost to Mr Asa, who faces a general election at the end of this month.
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