|Japan has joined the growing number of major economies that are back in
Japan's economy grew 3.7 percent on an annualized basis from
April to June this year, the first time the world's second largest economy has
seen positive growth in 15 months.
The announcement of preliminary
figures by Japan's Cabinet Office comes after France and Germany surprised
economists last week by posting 0.3 percent growth for the second quarter of the
The news that Japan has rebounded -- the hardest hit of the major
economies because of its reliance on exports -- gives economists cautious
optimism that the worst of the global recession is over.
has seen a bottoming out of global demand, which has pushed out net exports ...
especially in high tech industries and basic materials, such as chemical, steel
and so on because of Chinese demand," said Hiromichi Shirakawa, chief economist
in Japan for Credit Suisse.
Japan's GDP grew just under 1 percent during
the three-month period and trade increased 1.6 percent.
The uptick marks
the end of the worst recession in Japan since the end of World War II. Japan's
GDP fell at a record pace during the January-March quarter, when GDP was 15.4
percent lower than the same time period last year.
The Japanese economy
was buoyed by a historic \15 trillion ($150 billion) stimulus package in May,
which included unemployment benefits, aid to struggling companies, promotion of
green industries and a variety of tax breaks.
"There are many times in
the past when tax breaks and fiscal stimulus were offered and failed, but this
time around, it worked," Shirakawa said.
Economists expect GDP to
continue modest growth through the rest of the year, especially with an expected
rebound in global auto sales this quarter. But whether the recovery can continue
into the new year after the stimulus package runs its course remains a question.
"Japan's economy still is quite sensitive to global demand ... and for consumer
demand to grow on a self-sustained basis still seems unlikely," Shirakawa said.