The Japanese economy shows excellent results for the sixth consecutive quarter. Despite strong inflationary pressures, the overall rate of economic development gives grounds for optimism. Exponential growth is supported by strong domestic demand and stable exports.
Japan’s GDP advanced by 4 percent in the second quarter year-on-year, missing market expectations of a 2.5 percent increase. On the quarterly basis, the Japanese economy expanded by 1 percent, above the forecast of 0.6 percent. In addition, the results of the first quarter were revised upwards from 1 percent to 1.5 percent. The increasing domestic demand has been boosting the economic growth for several quarters. Masaki Kuwahara, senior economist at Nomura Securities in Tokyo, noted that strong domestic demand, especially indicators of individual consumption, supports the growth of the economy as a whole. The second quarter readings also turned out to be better than expected.
However, exports, on the contrary, began to slow down and hinder the overall growth. "It seems that the export has reached its peak and will slow down, because there is a pause in the recovery of the global economy," Kuwahara added. According to the economist, the appetite for spending has improved on the background of stocks growth, although the increase in income was not large. Costs are unlikely to continue to grow at such a rate, if wages in Japan stay unchanged, Kuwahara warned.
