Japan’s economy has moved out of recession, ending its longest slump since World War Two.
It is the third G7 country to return to growth after Germany and France posted positive results. But analysts say caution should remain the watchword for the world’s second largest economy. Preliminary figures released on Monday show growth in the second quarter of this year of just under 1 percent, a fraction lower than some analysts had been forecasting. Nevertheless, the results are being hailed by the government as a sign that its stimulus measures have been effective. It is welcome news for Japan’s Prime Minister, Taro Aso, with polls predicting he is facing defeat in this month’s election. “The economic growth figures that were released today showed growth for the first time in a year and three months. However, people have yet to feel the recovery for themselves, we’re still in the process. The economy is the most important. I vow to revive Japan’s economy,” he told a news conference. However, continuing the trend will depend to a large extent on recovery in the rest of the world as Japan’s economy is heavily reliant on exports; and those exports may slow as stimulus measures in other countries wear off. This morning’s figures did not have a positive impact on Asian markets, which were weighed down by other gloomier data from the US.