Spurred by a 6.4 percent jump in exports,
Japan seems to have turned a corner with regard to its most serious recession
since World War Two.
The economy recorded growth for a full
quarter, the first time since the global financial crisis last year. The cabinet office released the encouraging
figures on Friday revealing an increase in GDP of 3.8 percent annualized rate
for the quarter.
The sudden jump in exports is the first
rise since Lehman Brothers collapsed last year and the largest increase for
over seven years.
Japan has followed in the footsteps of the
two largest economies in Europe, Germany and France, who emerged from recession
in the latest quarter.
Few analysts believed that Japan, the
world’s second largest economy, would turn the corner so quickly. The country
relies heavily on its exports for consumer durables such as cars and
electronics, and a downturn in world demand in that area was what many blamed
for their economy’s decline in the first place.
Now that economists have seen Japan clawing
their way back into growth, there is cautious optimism regarding other big
economies.
The United States economy experienced its
smallest contraction in a year, only 1 percent annualized for the last quarter.
Meanwhile, in the euro zone, there was only a 0.2 percent contraction. Having
invested over half a trillion dollars into stimulus, China has seen growth of
nearly 8 percent from the first quarter.
Although these latest figures may not be
enough to save Japanese PM Taro Aso and keep his party in power after the
coming general election, they do seem to bear out Aso’s promises that Japan
would be one of the first countries to emerge from the darkness.
Stuart Poulson, Head of Corporate trading
at Nikko-Desjardins Asset Management said, “We have definitely seen some
excellent short term benefits from Aso’s policies. Some politicians mocked his
methods only a few months ago but I think the general sentiment now is that his
cash hand-outs and green energy incentives have come up trumps.”
The increase in exports is a welcome
respite from the crunch brought on by last year’s crisis and over 12 months of
contraction including a record breaking 13 percent annualised dip in gross
domestic product in late 2008.
Other nations in the region have also
reported growth in the last quarter including China, South Korea and Singapore
which has surprised many observers.
