Home / World Business
Tue, Jan 17, 2006 - Page 12 News List

Japan shows more signs of economic rebound

RECOVERY AT LAST?The nation posted a growing current account surplus for the third straight month, raising hopes that the world's No 2 economy is at last waking up

AFP , TOKYO

Japan's economy showed fresh signs of awakening from a decade-long slumber yesterday with the current account surplus growing for a third straight month, industrial output picking up and deflation easing.

The surplus in the current account, the broadest measure of trade in goods and services, rose 15.1 percent from a year earlier to ?1.42 trillion (US$12.5 billion), the finance ministry said.

The trade surplus alone edged up 0.3 percent year-on-year to ?703.6 billion. Imports rose 16.5 percent to ?4.91 trillion while exports were up 14.2 percent to ?5.62 trillion.

"While exports are now enjoying a solid recovery, imports are witnessing a slowdown in the pace of growth due to a peaking out of crude oil prices," a finance ministry official said.

Despite political tension between the countries, China keeps snapping up more Japanese exports, helping to underpin a recovery in the world's second-largest economy after a decade of stagnation.

"With exports to China, demand -- which had slowed late last year -- is now seeing a solid rebound, and with firm demand in the US continuing, Japanese exports are most likely to maintain brisk gains in the near term," said Taro Saito, an economist at NLI Research Institute.

Analysts said a weakening in the value of the yen against the dollar over the past year should fuel demand for Japanese exports.

The government also revised upwards its estimates for industrial production to show a gain of 1.5 percent in November from October as plants and factories ramped up production to historically high levels.

The gain was bigger than the 1.4 percent rise reported in an initial estimate last month and an improvement on October's 0.6 percent gain.

Year-on-year, industrial output growth was revised upwards to 3.4 percent in November from 3.3 percent.

The industrial output index hit a record high in November, reaching 103.6 and surpassing a previous all-time peak of 103.4 struck in May 1991.

There was also good news on the deflation front as producer prices showed the sharpest increase for over 15 years last month, raising hopes that the world's number two economy is almost rid of its deflation curse.

The wholesale goods price index last month rose 2.2 percent from November, the 22nd straight monthly gain and at the fastest pace since 1990, the Bank of Japan said. Month-on-month the index rose 0.2 percent last month.

This story has been viewed 2362 times.
TOP top