Japanese economy out of recession . Maybe
Tokyo (AsiaNews / Agencies) - The Japanese economy grew by 0.9% in second quarter of 2009 (3.7% on an annual basis), after months of the worst recession since the Second World War. But analysts urge caution and the reactions of investors are cold, the Tokyo Stock Exchange closed today at a loss.
Yoshimasa Hayashi, Minister of Economy, said that "the situation is still difficult, but we expect that the Japanese economy will grow”. For the government the data is crucial in view of the general elections on August 30, with polls showing the Liberal Democratic Party of Prime Minister Taso Aso likely a suffer serious defeat.
Experts agree that the outcome is the result of robust government funding for industry in recent months amounting to thousands of billions of yen. They observe that the economy has yet to show that it can recover on it’s won strengths and that this growth does cancel out the heavy losses of the first quarter 2009 (-3.1%) and fourth quarter 2008 (-3.5%). They further note that the recovery has also been helped by the exports to China, also a result of funding granted by the Chinese government.
Kyohei Morita, economic expert of Barclays Capital, forecasts a modest growth for the third quarter and is waiting to see what will happen from October onwards, when the effect of the stimulus of government funding will have worn out.
Other analysts are more optimistic and argue that this is the first increase for nearly a year and a half. They emphasize that domestic consumption, which represents over 60% of the economy, rose by 0.8%. They also observe that it is the best result among all the industrialized countries, compared with the contraction of 1% in U.S. and the general drop of 0.1% in the European Union.
The concerns of the financial world and among investors, however, are demonstrated by the decline in the stock market: the Tokyo Stock Exchange lost 2.6% today, a knock on result of losses on Wall Street last week and rising oil and coal prices. In general, the stock market has lost around 15% so far in August and many forecast increased volatility in coming days, reflecting the general uncertainty over the actual economic situation in Japan and its main trading partners.