“Appetite for Japanese cars is slowly recovering around the world, thanks to government schemes to encourage people to replace their old vehicles. Overall Japanese exports grew 6.3% in the second quarter from the previous three months. That’s reduced stockpiles of goods, and encouraged firms to start producing again.”
Japan has come out of recession after its economy grew by 0.9% in the April-to-June quarter. The growth comes after four consecutive quarters of contraction.
Correspondents say the rise is due to a huge government stimulus package and it is unclear whether the momentum will be sustained when this is concluded. Recent figures show other economies coming out of recession, including Germany, France and Hong Kong, a sign the global slowdown is easing.
Despite Japan exiting recession, the country’s main share index, the Nikkei, fell back as the rate of growth was not as large as analysts had hoped. If Japan’s latest quarterly rate were maintained for a full year, the economy would grow 3.7%, but this was less than market expectations of 3.9%. The Nikkei ended down 329 points or 3.1% to 10,269.
‘Positive contribution’
Japan officially fell into recession last year and there was a dramatic fall in growth in the January-March period as the world economic slowdown hit Japanese exports hard.
Government stimulus measures totalling $260bn (£159bn) helped to boost the economy, including cash handouts and subsidies to buy energy-efficient cars and home appliances, the BBC’s Roland Buerk in Tokyo says.
Manufacturers also benefited from recovering demand in China and other markets, with overall exports up 6.3% during the quarter. But Japan could still face a long road to sustainable recovery, our correspondent says, with domestic private consumption rising only 0.8% despite the stimulus measures.
Seijiro Takeshita, director of Mizuho Financial, Japan’s second largest banking group, told the BBC that the Japanese economy was now staging a “true comeback”.
“We are definitely getting out of the excessive pessimism that we have been seeing… however, a lot of big questions remain, namely private consumption,” he said.
“We know this time it was good, but that was due to a lot of government stimulus spending.”
