Japan’s economy in the green: GDP growth report

Japan’s economy in the green: GDP growth report

Japan is on track to announce its fifth straight quarter of economic growth on Thursday, marking the country’s longest growth

41508149 - 13_02_2017 - JAPAN ECONOMY_0

Japan is on track to announce its fifth straight quarter of economic growth on Thursday, marking the country’s longest growth streak in more than a decade.

A recovery in consumer spending and stronger exports are driving the first quarter’s predicted 1.9% increase in GDP. However, Japan continues to struggle with lukewarm inflation, with prices only up 0.2% compared to last March—well shy of the 2% target.

Despite this, Bank of Japan Governor Haruhiko Kuroda is said to be contemplating an exit strategy from a four-year monetary easing policy in response to the country’s labour shortage.

But the news isn’t all good. In the three months to March, Japan’s vehicle shipments to the US dropped 3.8% reflecting lagging US demand for foreign autos. Speaking after the first day of the G7 meeting, Japanese Finance Minister Taro Aso warned that uncertainty over US economic policies was limiting business confidence both internationally and domestically. In this environment, Japan’s future GDP growth appears less than certain.