Japan's exports fell the most since the 2009 global financial crisis in April as the coronavirus pandemic slammed world demand for cars, industrial materials and other goods, likely pushing the world's third-largest economy deeper into recession.

COVID-19 Pandemic: Japan exports fall most since 2009

The postponement of 2020 Tokyo Olympics will provide an economic boost to the coronavirus-hit Japan in the year 2021, a senior International Olympic Committee (IOC) official claimed on Thursday as he said that conducting the Games in 2021 could be a "very positive opportunity for an economic stimulus" that could "kickstart the economy again." for the world’s third-largest economy – Japan.&nbsp;

With the deadly COVID-19 taking almost the entire world under its dreaded wings, the IOC and Japan, in the month of March, took the historic decision to postpone the Olympics by one year with the opening ceremony now scheduled to be held on July 23, 2021.

The COVID-19 pandemic has made a huge body blow to the global economy with economists predicting a second Great Depression with around $9 trillion wiped out.

ALSO READ:&nbsp;<a href="https://www.wionews.com/sports/official-ipl-2020-suspended-till-further-notice-amid-covid-19-pandemic-292914" hreflang="en">Official: IPL 2020 suspended till further notice amid COVID-19 pandemic</a>

"I think there will be a lot of countries and cities around the world wishing for a similar opportunity," IOC official John Coates said.

Some economists have predicted that postponing the quadrennial Games by a year would reduce Japan’s GP by around $6 billion and that could be only recouped if the Olympics take place.&nbsp;

Coates claimed Japanese Prime Minister Shinzo Abe "may well have had in mind that your country may be in a recession then and this would be an opportunity for a great economic stimulus".

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Organisers had earlier said that the postponement of the Games would come major ramifications and there will be “massive” additional cost from the $12.6 billion the Games were supposed to cost-shared between the Japanese government, Tokyo 2020 and the host city.

Coates said that they would use the time in hand to look at a different way of reducing the additional costs.

Postponing the Olympics is an unprecedented task that starts with managing the venues, hotel bookings, volunteers, etc. Given the situation surrounding COVID-19 pandemic improves in coming months, then the Tokyo Olympics would not only come as a welcome event in the world of sports but would also help in reviving the Japanese economy, which has not only taken a hit due to the pandemic but also for the postponement of the Games. 
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The postponement of 2020 Tokyo Olympics will provide an economic boost to the coronavirus-hit Japan in the year 2021, a senior International Olympic Committee (IOC) official claimed on Thursday as he said that conducting the Games in 2021 could be a "very positive opportunity for an economic stimulus" that could "kickstart the economy again.

The postponement of 2020 Tokyo Olympics will provide an economic boost to the coronavirus-hit Japan in the year 2021, a senior International Olympic Committee (IOC) official claimed on Thursday as he said that conducting the Games in 2021 could be a "very positive opportunity for an economic stimulus" that could "kickstart the economy again." for the world’s third-largest economy – Japan. With the deadly COVID-19 taking almost the entire world under its dreaded wings, the IOC and Japan, in the month of March, took the historic decision to postpone the Olympics by one year with the opening ceremony now scheduled to be held on July 23, 2021. The COVID-19 pandemic has made a huge body blow to the global economy with economists predicting a second Great Depression with around $9 trillion wiped out. ALSO READ: Official: IPL 2020 suspended till further notice amid COVID-19 pandemic "I think there will be a lot of countries and cities around the world wishing for a similar opportunity," IOC official John Coates said. Some economists have predicted that postponing the quadrennial Games by a year would reduce Japan’s GP by around $6 billion and that could be only recouped if the Olympics take place. Coates claimed Japanese Prime Minister Shinzo Abe "may well have had in mind that your country may be in a recession then and this would be an opportunity for a great economic stimulus". ALSO READ: 'It took many moments sitting, thinking and crying': Coco Gauff reveals struggle with depression and extreme pressure Organisers had earlier said that the postponement of the Games would come major ramifications and there will be “massive” additional cost from the $12.6 billion the Games were supposed to cost-shared between the Japanese government, Tokyo 2020 and the host city. Coates said that they would use the time in hand to look at a different way of reducing the additional costs. Postponing the Olympics is an unprecedented task that starts with managing the venues, hotel bookings, volunteers, etc. Given the situation surrounding COVID-19 pandemic improves in coming months, then the Tokyo Olympics would not only come as a welcome event in the world of sports but would also help in reviving the Japanese economy, which has not only taken a hit due to the pandemic but also for the postponement of the Games.

Postponed Tokyo Olympics 'to kickstart' Japan economy: IOC

Japan registers worst slump in 5 years. where its economy hit by low consumer spending. Japan is currently facing a recession due to many occurring circumstances that have caused Japan's economy to slowly spiral down.

Japan's Economy shrank sharply | Wion News | World News

The number of babies born in <a href="https://www.wionews.com/world/japan-south-korea-committed-to-dialogue-to-resolve-north-korea-issue-china-269879">Japan</a> fell an estimated 5.9 per cent&nbsp;this year to fewer than 900,000 for the first time since the government started compiling data in 1899, the welfare ministry said on Tuesday.

The dwindling number of births will put more strain on welfare finances to support snowballing costs of supporting an ageing population, which would undermine <a href="https://www.wionews.com/business-economy/japan-to-trim-total-govt-bond-issuance-next-fiscal-year-sources-268875">economic growth</a>, analysts say.

There were 512,000 more deaths than births this year, the first time the figure has surpassed 500,000, with 864,000 babies born. Last year, 918,400 babies were born.

This was the biggest decline in births since 1975, driven by fewer women aged 25 to 39, said a ministry official in charge of compiling the data.

The government is hoping for a birth rate of 1.8 per cent&nbsp;- which would appear a tall order given the rate was 1.42 per cent&nbsp;in 2018.

The number of babies born in Japan fell an estimated 5.9 per cent this year to fewer than 900,000 for the first time since the government started compiling data in 1899, the welfare ministry said on Tuesday.

The number of babies born in Japan fell an estimated 5.9 per cent this year to fewer than 900,000 for the first time since the government started compiling data in 1899, the welfare ministry said on Tuesday. The dwindling number of births will put more strain on welfare finances to support snowballing costs of supporting an ageing population, which would undermine economic growth, analysts say. There were 512,000 more deaths than births this year, the first time the figure has surpassed 500,000, with 864,000 babies born. Last year, 918,400 babies were born. This was the biggest decline in births since 1975, driven by fewer women aged 25 to 39, said a ministry official in charge of compiling the data. The government is hoping for a birth rate of 1.8 per cent - which would appear a tall order given the rate was 1.42 per cent in 2018.

Fewer than 900,000 new Japanese babies this year for first time on record

Japanese big manufacturers' business mood sank to a near seven-year low in the fourth quarter, a closely watched central bank survey showed, as the US-China trade war and soft global demand weighed on the export-reliant economy.

Companies expect conditions to remain unchanged or even worsen three months ahead, the Bank of Japan's "tankan" quarterly survey showed, suggesting that the fallout from the trade conflict could hurt broader sectors of the economy.

But there were some bright signs. Non-manufacturers' sentiment appeared to weather the hit from October's sales tax hike with companies maintaining robust capital expenditure plans, reinforcing market expectations the BOJ will hold off on expanding stimulus at next week's rate review.

"The tankan suggests that the economy is slowing rather than collapsing so the BOJ is unlikely to cut interest rates at next week's meeting," said Marcel Thieliant, senior Japan economist at Capital Economics.

The headline index for big manufacturers' sentiment stood at 0 in December, down from plus 5 in September and worse than a median market forecast of plus 2, the tankan showed on Friday.

It marked the fourth straight quarter of decline and hit the lowest reading since March 2013, a month before BOJ Governor Haruhiko Kuroda deployed his "bazooka" monetary stimulus to pull Japan out of deflation.

Underscoring the pain from the trade war, an index gauging big automakers' sentiment turned negative for the first time in more than three years.

Some steel and cement makers also saw demand ahead of the 2020 Tokyo Olympic Games peak, a BOJ official told reporters.

"The weakness in automakers' sentiment is noteworthy. The global economy is taking longer to recover and that uncertainty is affecting Japanese companies," said Tsuyoshi Ueno, senior economist at NLI Research Institute.

A sales tax hike that rolled out in October weighed on Japan's service sector, with the index for big non-manufacturers sliding to plus 20 from plus 21 in September. But the reading exceeded a Refinitiv estimate of plus 17.

"Domestic demand wasn't hurt much by the sales tax hike so far. Public works projects to be earmarked under the government's spending package will underpin growth," said Mari Iwashita, chief market economist at Daiwa Securities.

Big firms plan to increase capital expenditure by 6.8% in the current business year ending in March 2020, up slightly from their plan made three months ago, the survey showed. It compared with a median market forecast of a 6.0% gain.

The reading backs the BOJ's view that robust corporate spending plans will keep domestic demand firm and help the economy weather heightening overseas risks, analysts say.

"Domestic demand may slow temporarily ... though in the long-term, it will stay resilient," BOJ Deputy Governor Masayoshi Amamiya said on Thursday, adding that now was the time to stand pat and carefully watch upcoming data.

Capital expenditure has been among the few bright spots in Japan's economy as companies continue to invest in high-tech and labour-saving technology to cope with a labour crunch.

Japan's economy expanded at a much faster pace than initially reported in the third quarter, as solid domestic demand and business spending offset the pain from weak exports and output.

But many analysts anticipate a slowdown this quarter as the October sales tax hike weighs on consumption.

The tankan's sentiment indexes are derived by subtracting the number of respondents who say conditions are poor from those who say they are good. A positive reading means optimists outnumber pessimists.

Japanese big manufacturers' business mood sank to a near seven-year low in the fourth quarter, a closely watched central bank survey showed, as the US-China trade war and soft global demand weighed on the export-reliant economy.

Japanese big manufacturers' business mood sank to a near seven-year low in the fourth quarter, a closely watched central bank survey showed, as the US-China trade war and soft global demand weighed on the export-reliant economy. Companies expect conditions to remain unchanged or even worsen three months ahead, the Bank of Japan's "tankan" quarterly survey showed, suggesting that the fallout from the trade conflict could hurt broader sectors of the economy. But there were some bright signs. Non-manufacturers' sentiment appeared to weather the hit from October's sales tax hike with companies maintaining robust capital expenditure plans, reinforcing market expectations the BOJ will hold off on expanding stimulus at next week's rate review. "The tankan suggests that the economy is slowing rather than collapsing so the BOJ is unlikely to cut interest rates at next week's meeting," said Marcel Thieliant, senior Japan economist at Capital Economics. The headline index for big manufacturers' sentiment stood at 0 in December, down from plus 5 in September and worse than a median market forecast of plus 2, the tankan showed on Friday. It marked the fourth straight quarter of decline and hit the lowest reading since March 2013, a month before BOJ Governor Haruhiko Kuroda deployed his "bazooka" monetary stimulus to pull Japan out of deflation. Underscoring the pain from the trade war, an index gauging big automakers' sentiment turned negative for the first time in more than three years. Some steel and cement makers also saw demand ahead of the 2020 Tokyo Olympic Games peak, a BOJ official told reporters. "The weakness in automakers' sentiment is noteworthy. The global economy is taking longer to recover and that uncertainty is affecting Japanese companies," said Tsuyoshi Ueno, senior economist at NLI Research Institute. A sales tax hike that rolled out in October weighed on Japan's service sector, with the index for big non-manufacturers sliding to plus 20 from plus 21 in September. But the reading exceeded a Refinitiv estimate of plus 17. "Domestic demand wasn't hurt much by the sales tax hike so far. Public works projects to be earmarked under the government's spending package will underpin growth," said Mari Iwashita, chief market economist at Daiwa Securities. Big firms plan to increase capital expenditure by 6.8% in the current business year ending in March 2020, up slightly from their plan made three months ago, the survey showed. It compared with a median market forecast of a 6.0% gain. The reading backs the BOJ's view that robust corporate spending plans will keep domestic demand firm and help the economy weather heightening overseas risks, analysts say. "Domestic demand may slow temporarily ... though in the long-term, it will stay resilient," BOJ Deputy Governor Masayoshi Amamiya said on Thursday, adding that now was the time to stand pat and carefully watch upcoming data. Capital expenditure has been among the few bright spots in Japan's economy as companies continue to invest in high-tech and labour-saving technology to cope with a labour crunch. Japan's economy expanded at a much faster pace than initially reported in the third quarter, as solid domestic demand and business spending offset the pain from weak exports and output. But many analysts anticipate a slowdown this quarter as the October sales tax hike weighs on consumption. The tankan's sentiment indexes are derived by subtracting the number of respondents who say conditions are poor from those who say they are good. A positive reading means optimists outnumber pessimists.

Japan business mood gloomiest in nearly seven years as trade war bites

<a href="https://www.wionews.com/world/japan-ex-pm-nakasone-who-boosted-ties-with-us-dies-at-101-265192">Japan</a>&nbsp;is&nbsp;preparing&nbsp;an economic&nbsp;stimulus&nbsp;package&nbsp;worth $120&nbsp;billion&nbsp;to support fragile economic&nbsp;growth, two government officials with direct knowledge of the matter said on Tuesday, complicating government efforts to fix public finances.

The spending would be earmarked in a supplementary budget for this fiscal year to next March and an annual budget for the coming fiscal year from April. Both budgets will be compiled later this month, the sources told Reuters, declining to be identified because the&nbsp;package&nbsp;has not been finalised.

While the&nbsp;package&nbsp;would come to around 13 trillion yen (93.5&nbsp;billion&nbsp;pounds), that would rise to 25 trillion yen ($230&nbsp;billion) when private-sector and other spending are included.

However, the spending could strain the industrial world's heaviest public debt burden, which tops more than twice the size of&nbsp;Japan's $5 trillion economy.

And despite the headline size of the&nbsp;stimulus, actual spending would be smaller in the current fiscal year, and economists are not expecting much of a boost.

"We expect this fiscal year's extra budget to total around 3-4 trillion yen. We should not expect it to substantially push up the GDP&nbsp;growth rate," said Takuya Hoshino, senior economist at Dai-ichi Life Research Institute.

The 13 trillion yen includes more than 3 trillion yen from fiscal investment and loan programmes, as the heavily indebted government seeks to take advantage of low borrowing costs under the Bank of&nbsp;Japan's negative interest rate policy.

Direct government spending is expected to reach around 7-8 trillion yen, they said.

Sources of funding the big-spending remain unclear. A final decision on the&nbsp;package&nbsp;could be made as early as Thursday.

Japan is preparing an economic stimulus package worth $120 billion to support fragile economic growth, two government officials with direct knowledge of the matter said on Tuesday, complicating government efforts to fix public finances.

Japan is preparing an economic stimulus package worth $120 billion to support fragile economic growth, two government officials with direct knowledge of the matter said on Tuesday, complicating government efforts to fix public finances. The spending would be earmarked in a supplementary budget for this fiscal year to next March and an annual budget for the coming fiscal year from April. Both budgets will be compiled later this month, the sources told Reuters, declining to be identified because the package has not been finalised. While the package would come to around 13 trillion yen (93.5 billion pounds), that would rise to 25 trillion yen ($230 billion) when private-sector and other spending are included. However, the spending could strain the industrial world's heaviest public debt burden, which tops more than twice the size of Japan's $5 trillion economy. And despite the headline size of the stimulus, actual spending would be smaller in the current fiscal year, and economists are not expecting much of a boost. "We expect this fiscal year's extra budget to total around 3-4 trillion yen. We should not expect it to substantially push up the GDP growth rate," said Takuya Hoshino, senior economist at Dai-ichi Life Research Institute. The 13 trillion yen includes more than 3 trillion yen from fiscal investment and loan programmes, as the heavily indebted government seeks to take advantage of low borrowing costs under the Bank of Japan's negative interest rate policy. Direct government spending is expected to reach around 7-8 trillion yen, they said. Sources of funding the big-spending remain unclear. A final decision on the package could be made as early as Thursday.

Japan preparing $120 billion stimulus package as recession risks grow

Japanese Prime Minister <a href="https://www.wionews.com/world/moon-abe-hold-friendly-talks-on-asean-sidelines-259835">Shinzo&nbsp;Abe</a>&nbsp;on Friday asked his&nbsp;cabinet&nbsp;to&nbsp;compile&nbsp;a&nbsp;package&nbsp;of&nbsp;stimulus&nbsp;measures to&nbsp;support&nbsp;the&nbsp;economy&nbsp;and build infrastructure to cope with large natural disasters, the government's top spokesman said.

Chief&nbsp;Cabinet&nbsp;Secretary Yoshihide Suga told reporters that the&nbsp;package&nbsp;will include steps to promote investment for growth through aggressive use of fiscal investment and loan programmes.

The government will&nbsp;compile&nbsp;the&nbsp;package&nbsp;as soon as possible, though the size of spending will depend on proposals to be made by various ministries,&nbsp;Economy&nbsp;Minister Yasutoshi Nishimura told a news conference after a regular&nbsp;cabinet&nbsp;meeting.

"I've received an instruction from the prime minister to&nbsp;compile&nbsp;a new economic&nbsp;package&nbsp;to guard against the chance overseas risks may hurt&nbsp;Japan's&nbsp;economy," Nishimura said.

Japanese policymakers have been under pressure to fend off heightening overseas risks with a diminishing tool-kit, as the<a href="https://www.wionews.com/world/china-us-agree-tariff-rollback-if-phase-one-trade-deal-is-completed-260641"> US-China trade war </a>and soft global demand hurt the export-reliant&nbsp;economy.

Finance Minister Taro Aso said the planned economic&nbsp;package&nbsp;should help enhance productivity and achieve strong growth to overcome the pressure caused by the declining population, which he said was the "biggest problem" Japan faces in the long run.

Aso added that the size and scope of the&nbsp;stimulus&nbsp;still needed to be worked out. He suggested that a supplementary budget would be&nbsp;compiled by the year-end, along with an annual budget for the next fiscal year that starts in April 2020, to ensure the economic&nbsp;package&nbsp;would be rolled out seamlessly over a 15-month period.

Abe&nbsp;had told a top economic council on Thursday that the government will consider what policy measures it can take to prevent intensifying global risks from derailing the export-reliant economic recovery.

Japan's&nbsp;economic growth likely slowed to an annualised 0.8 per cent&nbsp;in July-September from 1.3 per cent&nbsp;in the second quarter, a Reuters poll showed this week. The data will be reported on November&nbsp;14.

An increase in the sales tax to 10 per cent&nbsp;from 8 per cent, put in place from October, may also hurt consumption, analysts say.

Slowing growth underscores the challenge for&nbsp;Abe's government as it tries to strike a delicate balance between the need to boost growth and fix the industrial world's heaviest public debt burden that is more than twice the size of&nbsp;Japan's&nbsp;$5 trillion&nbsp;economy.

Some economists worry that additional public works spending would further strain the nation's dire public finances and aggravate a labour crunch in a fast-ageing population.

Japanese Prime Minister Shinzo Abe on Friday asked his cabinet to compile a package of stimulus measures to support the economy and build infrastructure to cope with large natural disasters, the government's top spokesman said.

Japanese Prime Minister Shinzo Abe on Friday asked his cabinet to compile a package of stimulus measures to support the economy and build infrastructure to cope with large natural disasters, the government's top spokesman said. Chief Cabinet Secretary Yoshihide Suga told reporters that the package will include steps to promote investment for growth through aggressive use of fiscal investment and loan programmes. The government will compile the package as soon as possible, though the size of spending will depend on proposals to be made by various ministries, Economy Minister Yasutoshi Nishimura told a news conference after a regular cabinet meeting. "I've received an instruction from the prime minister to compile a new economic package to guard against the chance overseas risks may hurt Japan's economy," Nishimura said. Japanese policymakers have been under pressure to fend off heightening overseas risks with a diminishing tool-kit, as the US-China trade war and soft global demand hurt the export-reliant economy. Finance Minister Taro Aso said the planned economic package should help enhance productivity and achieve strong growth to overcome the pressure caused by the declining population, which he said was the "biggest problem" Japan faces in the long run. Aso added that the size and scope of the stimulus still needed to be worked out. He suggested that a supplementary budget would be compiled by the year-end, along with an annual budget for the next fiscal year that starts in April 2020, to ensure the economic package would be rolled out seamlessly over a 15-month period. Abe had told a top economic council on Thursday that the government will consider what policy measures it can take to prevent intensifying global risks from derailing the export-reliant economic recovery. Japan's economic growth likely slowed to an annualised 0.8 per cent in July-September from 1.3 per cent in the second quarter, a Reuters poll showed this week. The data will be reported on November 14. An increase in the sales tax to 10 per cent from 8 per cent, put in place from October, may also hurt consumption, analysts say. Slowing growth underscores the challenge for Abe's government as it tries to strike a delicate balance between the need to boost growth and fix the industrial world's heaviest public debt burden that is more than twice the size of Japan's $5 trillion economy. Some economists worry that additional public works spending would further strain the nation's dire public finances and aggravate a labour crunch in a fast-ageing population.

Japan's Abe tells cabinet to compile stimulus package to support economy

The&nbsp;Bank&nbsp;of&nbsp;Japan&nbsp;held&nbsp;fire&nbsp;on Thursday but suggested it could&nbsp;cut&nbsp;rates in the&nbsp;future, reflecting its fears that global risks could weigh on the country's fragile recovery.

The announcement came just hours after the US <a href="https://www.wionews.com/world/trump-again-attacks-federal-reserve-says-central-bank-derelict-in-its-duties-258005">Federal Reserve</a>&nbsp;cut&nbsp;its benchmark interest&nbsp;rate&nbsp;for the third straight time as it gauges economic risks.

In its so-called "forward guidance"&nbsp;a signal the central&nbsp;bank&nbsp;gives to the market on its&nbsp;future&nbsp;policy decisions&nbsp;the BoJ said it expects rates "to remain at their present or lower levels."

Previously it had not made reference to the possibility of lower levels, saying instead it expected to keep "current ultra-low rates for an extended period of time, at least until the spring of 2020".

Thursday's announcement dropped the reference to that timeframe, hinting a change could come sooner.

The Japanese central&nbsp;bank&nbsp;warned that a pick-up in the global economy is likely to be delayed "mainly due to the intensified <a href="https://www.wionews.com/world/united-states-wants-china-trade-deal-in-same-time-frame-despite-apec-summit-cancellation-258895">US-China trade friction</a> as well as slowdowns" in emerging economies including China.

"Japan's economy is expected to grow temporarily at a somewhat slower pace than its potential" reflecting weak exports and the sales tax hike that came into effect on October 1, it said.

The&nbsp;Bank&nbsp;also revised down its inflation and growth forecasts for the world's third-largest economy.

The central&nbsp;bank&nbsp;said it expected prices to rise 0.7 per cent in the year to March 2020, down from a previous forecast of 1.0 per cent, and well short of its years-long target of two per cent.

It also revised down its forecast for the following year to 1.1 per cent from 1.3 per cent and downgraded its projection for the year to March 2022 from 1.6 per cent to 1.5 per cent.

The BoJ has consistently fallen short of hitting the two per cent target it considers key to turbocharging the stuttering economy, despite a barrage of stimulus and monetary easing packages.&nbsp;

Bank&nbsp;policymakers have argued that prolonged periods of low growth and inflation have created a "deflation mindset" that continues to weigh on the national economy.

In a statement, it said there had been "no further increase in the possibility that the momentum towards achieving the price stability would be lost".

But it warned at the same time that "it was necessary to continue to pay close attention to the possibility".

The central&nbsp;bank&nbsp;also slightly lowered its economic growth forecast, citing "the delay in the timing of a pick-up in the growth pace of overseas economies".

It&nbsp;now&nbsp;projects&nbsp;Japan's economy will grow 0.6 per cent in the year to March, 0.7 per cent for the following year and 1.0 per cent for the year to March 22.

&nbsp;

The Bank of Japan held fire on Thursday but suggested it could cut rates in the future, reflecting its fears that global risks could weigh on the country's fragile recovery.

The Bank of Japan held fire on Thursday but suggested it could cut rates in the future, reflecting its fears that global risks could weigh on the country's fragile recovery. The announcement came just hours after the US Federal Reserve cut its benchmark interest rate for the third straight time as it gauges economic risks. In its so-called "forward guidance" a signal the central bank gives to the market on its future policy decisions the BoJ said it expects rates "to remain at their present or lower levels." Previously it had not made reference to the possibility of lower levels, saying instead it expected to keep "current ultra-low rates for an extended period of time, at least until the spring of 2020". Thursday's announcement dropped the reference to that timeframe, hinting a change could come sooner. The Japanese central bank warned that a pick-up in the global economy is likely to be delayed "mainly due to the intensified US-China trade friction as well as slowdowns" in emerging economies including China. "Japan's economy is expected to grow temporarily at a somewhat slower pace than its potential" reflecting weak exports and the sales tax hike that came into effect on October 1, it said. The Bank also revised down its inflation and growth forecasts for the world's third-largest economy. The central bank said it expected prices to rise 0.7 per cent in the year to March 2020, down from a previous forecast of 1.0 per cent, and well short of its years-long target of two per cent. It also revised down its forecast for the following year to 1.1 per cent from 1.3 per cent and downgraded its projection for the year to March 2022 from 1.6 per cent to 1.5 per cent. The BoJ has consistently fallen short of hitting the two per cent target it considers key to turbocharging the stuttering economy, despite a barrage of stimulus and monetary easing packages. Bank policymakers have argued that prolonged periods of low growth and inflation have created a "deflation mindset" that continues to weigh on the national economy. In a statement, it said there had been "no further increase in the possibility that the momentum towards achieving the price stability would be lost". But it warned at the same time that "it was necessary to continue to pay close attention to the possibility". The central bank also slightly lowered its economic growth forecast, citing "the delay in the timing of a pick-up in the growth pace of overseas economies". It now projects Japan's economy will grow 0.6 per cent in the year to March, 0.7 per cent for the following year and 1.0 per cent for the year to March 22.

Bank of Japan suggests future rate cut, but holds fire for now

Japan's economy grew at a faster-than-expected clip in the second quarter, official data showed on Friday, helped by celebrations to usher in a new imperial era.

Gross domestic product (GDP) in the world's third-biggest economy grew 0.4 per cent from the previous quarter, the Cabinet Office said, beating analysts' median forecast of 0.1 per cent.

The third straight period of expansion will also bolster Prime Minister Shinzo Abe's determination to push through a controversial sales tax hike in October despite warnings it could weigh on growth.

Shoppers are rushing to make purchases before the rate rises from eight per cent to 10 per cent on October 1 and this boost for consumption also helped push GDP higher, economists said.

An unprecedented 10-day holiday for the enthronement of Emperor Naruhito, which kicked off a new imperial era in Japan, also pepped up the figures, according to analysts.

However, trade frictions between the US and China weighed on exports and corporate spending in some sectors such as machinery, said Yuichiro Nagai, senior economist at Mizuho Securities.

"But investments in software, research and development, and construction were good," he told AFP.

Nagai said a rush by consumers to buy before the sales tax hike will likely become even more pronounced in the July-September quarter, helping Japan log another quarter of growth.

And while the economy would likely contract in October-December due to the higher tax, it should rebound next year and avoid slipping into a recession, Nagai said.

"There is uncertainty over where the trade war will go... With the US presidential election coming next year, however, I believe the main scenario is that they will find a compromise plan" later this year, he said.

'Additional monetary easing'

The last time Japan hiked its sales tax, in 2014, the result was a slump in consumption and the wider economy and some economists have warned that now is not the time to raise the rate amid uncertainty over global trade and Brexit.

But Tokyo has vowed to go through with the plan unless there is a crisis on the level of the 2008 financial meltdown and Abe has promised countermeasures to cushion the blow on the economy.

SMBC Nikko Securities chief market economist Yoshimasa Maruyama said the Japanese economy would likely expand further in the July-September period but warned it could slide into a mild recession in October-December as the global economy slows.

"By the time autumn comes, debates for a supplementary budget will start and calls for additional monetary easing will get louder," he said in a report released ahead of the GDP announcement.

But Naoya Oshikubo, senior economist at Sumitomo Mitsui Trust Asset Management, was not so gloomy.

"Going forward, central banks are expected to continue easing, and the Chinese government will likely announce fiscal measures, resulting in a global economic recovery, which should help Japan maintain its momentum," Oshikubo said in a report.&nbsp;

Besides the planned tax hike, the impact from trade frictions between Japan and South Korea could be a headwind, he said.

"But both should be limited in their effects," he said as the affected goods make up only a fraction of Japanese exports.

Japan's economy grew at a faster-than-expected clip in the second quarter, official data showed on Friday, helped by celebrations to usher in a new imperial era.

Japan's economy grew at a faster-than-expected clip in the second quarter, official data showed on Friday, helped by celebrations to usher in a new imperial era. Gross domestic product (GDP) in the world's third-biggest economy grew 0.4 per cent from the previous quarter, the Cabinet Office said, beating analysts' median forecast of 0.1 per cent. The third straight period of expansion will also bolster Prime Minister Shinzo Abe's determination to push through a controversial sales tax hike in October despite warnings it could weigh on growth. Shoppers are rushing to make purchases before the rate rises from eight per cent to 10 per cent on October 1 and this boost for consumption also helped push GDP higher, economists said. An unprecedented 10-day holiday for the enthronement of Emperor Naruhito, which kicked off a new imperial era in Japan, also pepped up the figures, according to analysts. However, trade frictions between the US and China weighed on exports and corporate spending in some sectors such as machinery, said Yuichiro Nagai, senior economist at Mizuho Securities. "But investments in software, research and development, and construction were good," he told AFP. Nagai said a rush by consumers to buy before the sales tax hike will likely become even more pronounced in the July-September quarter, helping Japan log another quarter of growth. And while the economy would likely contract in October-December due to the higher tax, it should rebound next year and avoid slipping into a recession, Nagai said. "There is uncertainty over where the trade war will go... With the US presidential election coming next year, however, I believe the main scenario is that they will find a compromise plan" later this year, he said. 'Additional monetary easing' The last time Japan hiked its sales tax, in 2014, the result was a slump in consumption and the wider economy and some economists have warned that now is not the time to raise the rate amid uncertainty over global trade and Brexit. But Tokyo has vowed to go through with the plan unless there is a crisis on the level of the 2008 financial meltdown and Abe has promised countermeasures to cushion the blow on the economy. SMBC Nikko Securities chief market economist Yoshimasa Maruyama said the Japanese economy would likely expand further in the July-September period but warned it could slide into a mild recession in October-December as the global economy slows. "By the time autumn comes, debates for a supplementary budget will start and calls for additional monetary easing will get louder," he said in a report released ahead of the GDP announcement. But Naoya Oshikubo, senior economist at Sumitomo Mitsui Trust Asset Management, was not so gloomy. "Going forward, central banks are expected to continue easing, and the Chinese government will likely announce fiscal measures, resulting in a global economic recovery, which should help Japan maintain its momentum," Oshikubo said in a report. Besides the planned tax hike, the impact from trade frictions between Japan and South Korea could be a headwind, he said. "But both should be limited in their effects," he said as the affected goods make up only a fraction of Japanese exports.

Japan economy grows faster than expected on new-era holidays

Japan marks the end of an era with Tuesday's<a href="https://www.google.com/url?client=internal-uds-cse&amp;cx=006054055338965708568:09spwrlibei&amp;q=http://www.wionews.com/world/japans-emperor-akihito-to-abdicate-on-april-30-2019-25584%3Famp&amp;sa=U&amp;ved=2ahUKEwj3qb2ppPXhAhWFiHAKHU4UAyQQFjAAegQIBhAB&amp;usg=AOvVaw2LwpNaVncJQE1sznzZAkHv"> abdication of Emperor Akihito</a>, and the outgoing monarch leaves behind a much-changed country.

Crown Prince Naruhito will inherit a Japan vastly different from that of the start of his father's reign when the country was in the grip of an economic bubble and on the verge of a tech revolution.

Here are some of the ways Japan has changed dramatically during the Heisei imperial era of Akihito's rule:

Population decline&nbsp;

Japan's shrinking population is among the country's most pressing social and economic issues.&nbsp;

When Akihito took the throne, he was emperor of a country with a population of 123 million people.

The population continued growing for his first years in the job, peaking a decade ago at 128 million.

But since then, Japan's has been on a downward trend, with the birth rate regularly hitting new record lows.&nbsp;

The country's population now stands around 126 million and is continuing to decline despite government efforts to boost the birthrate.

China rising&nbsp;

Relations between Japan and China have not always been warm, but when it comes to trade, the two nations are on better terms.

When Akihito took the throne, the United States was still Japan's top trading partner -- a reflection of a relationship defined by the post-World War II experience.

But China overtook the US during Akihito's reign and trade with China has jumped more than 10-fold to 35 trillion yen from 2.7 trillion, far outstripping the 24 trillion yen in trade with the US.

Foreign gaze&nbsp;

Japan might now be a top international tourist destination, but that wasn't always the case.

Visitors have been pouring into the country in recent years, particularly ahead of the Rugby World Cup this year and Tokyo Summer Olympics in 2020.

Last year alone, 31 million foreign tourists came to Japan, a staggering increase from just 2.8 million the year Akihito took the throne.

And the government is hoping to boost that figure further, with a goal of 40 million tourists a year by 2020.

Women in politics&nbsp;

When Akihito took the throne, less than four per cent of parliamentary seats were occupied by women.

The rate has tripled since then, but still stands at just 14 per cent, a stubbornly low figure and out of step with most of the rest of the developed world.

Prime Minister Shinzo Abe's cabinet includes just one woman, despite his stated commitment to "womenomics" or increasing female representation in the workplace.

Smoking&nbsp;

When Akihito took the throne in 1989, Japan was a nation of smokers.

The majority of men smoked -- 61 per cent, though the rate was vastly lower among women, just 12 per cent.

But smoking rates have plunged in Japan, particularly among men, with only 28 per cent of the male population now smoking.

Among women, the rate has dropped to nine per cent.

Strict laws against smoking in the street and health campaigns have been implemented in recent years, though the government's most recent legislation to ban smoking in restaurants and bars came under fire after being watered down.

Smoking is still common in Japan's ubiquitous izakaya bar-restaurants.

High-tech toilets&nbsp;

Among the many pleasures of life in today's Japan is the high-tech toilet, complete with a warm water spray and often an array of other functions including an air dryer and even ambient noise.

Today, 80 per cent of households have "spray seats" according to government data.

But that figure was just 14 per cent in 1992, the earliest year for which data is available. 
&nbsp;&nbsp;

Japan marks the end of an era with Tuesday's abdication of Emperor Akihito, and the outgoing monarch leaves behind a much-changed country. Crown Prince Naruhito will inherit a Japan vastly different from that of the start of his father's reign when the country was in the grip of an economic bubble and on the verge of a tech revolution.

Japan marks the end of an era with Tuesday's abdication of Emperor Akihito, and the outgoing monarch leaves behind a much-changed country. Crown Prince Naruhito will inherit a Japan vastly different from that of the start of his father's reign when the country was in the grip of an economic bubble and on the verge of a tech revolution. Here are some of the ways Japan has changed dramatically during the Heisei imperial era of Akihito's rule: Population decline Japan's shrinking population is among the country's most pressing social and economic issues. When Akihito took the throne, he was emperor of a country with a population of 123 million people. The population continued growing for his first years in the job, peaking a decade ago at 128 million. But since then, Japan's has been on a downward trend, with the birth rate regularly hitting new record lows. The country's population now stands around 126 million and is continuing to decline despite government efforts to boost the birthrate. China rising Relations between Japan and China have not always been warm, but when it comes to trade, the two nations are on better terms. When Akihito took the throne, the United States was still Japan's top trading partner -- a reflection of a relationship defined by the post-World War II experience. But China overtook the US during Akihito's reign and trade with China has jumped more than 10-fold to 35 trillion yen from 2.7 trillion, far outstripping the 24 trillion yen in trade with the US. Foreign gaze Japan might now be a top international tourist destination, but that wasn't always the case. Visitors have been pouring into the country in recent years, particularly ahead of the Rugby World Cup this year and Tokyo Summer Olympics in 2020. Last year alone, 31 million foreign tourists came to Japan, a staggering increase from just 2.8 million the year Akihito took the throne. And the government is hoping to boost that figure further, with a goal of 40 million tourists a year by 2020. Women in politics When Akihito took the throne, less than four per cent of parliamentary seats were occupied by women. The rate has tripled since then, but still stands at just 14 per cent, a stubbornly low figure and out of step with most of the rest of the developed world. Prime Minister Shinzo Abe's cabinet includes just one woman, despite his stated commitment to "womenomics" or increasing female representation in the workplace. Smoking When Akihito took the throne in 1989, Japan was a nation of smokers. The majority of men smoked -- 61 per cent, though the rate was vastly lower among women, just 12 per cent. But smoking rates have plunged in Japan, particularly among men, with only 28 per cent of the male population now smoking. Among women, the rate has dropped to nine per cent. Strict laws against smoking in the street and health campaigns have been implemented in recent years, though the government's most recent legislation to ban smoking in restaurants and bars came under fire after being watered down. Smoking is still common in Japan's ubiquitous izakaya bar-restaurants. High-tech toilets Among the many pleasures of life in today's Japan is the high-tech toilet, complete with a warm water spray and often an array of other functions including an air dryer and even ambient noise. Today, 80 per cent of households have "spray seats" according to government data. But that figure was just 14 per cent in 1992, the earliest year for which data is available.

From Heisei to Reiwa: How Japan changed under Emperor Akihito

Japan's economy is expected to have contracted for the first time in two years in the first quarter due to weak private consumption and softer export demand, a Reuters poll showed on Friday.

A negative reading, while slight, would snap Japan's longest period of economic expansion - eight straight quarters of growth - since its 1980s bubble economy.

But analysts said the expected January-March weakness may be only a temporary soft patch, arguing that higher prices for fresh vegetables and bad winter weather likely weighed on consumer spending in the quarter.

The global economy also has remained firm, suggesting Japan will regain traction in the second quarter, they added.

Gross domestic product (GDP) probably shrank at an annualised rate of 0.2 per cent in the first quarter after a 1.6 of expansion in the final quarter of 2017, the poll of 18 analysts showed.

That would mark the first contraction in the world's third-largest economy since late 2015.

The annualised contraction would translate into a flat reading from the previous quarter.

"The economy had steadily recovered but it appeared to have come to a temporary standstill," said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute.

"Economic indicators such as factory output and firms' business sentiment have shown a softening momentum of the economy. The GDP data will likely reflect those moves."

Analysts believe there was no growth in private consumption in the quarter, after a 0.5 per cent gain in the final quarter last year. Private consumption accounts for 60 per cent of GDP.

External demand - or exports minus imports - also provided no contribution to GDP, the poll found. Japan's exports rose less than expected in March and a business survey showed export order growth slowed sharply in April due to a stronger yen.

Capital spending was forecast to rise 0.4 per cent in the quarter, slowing from a 1.0 per cent increase in the previous period but still up for a sixth straight quarter.

"The economy is expected to return to the pace of around annualised 1.0 per cent growth from April-June but we need to pay attention to impacts from the United States' trade protectionism including the currency movements," said Yusuke Ichikawa, senior economist at Mizuho Research Institute.

The Cabinet Office will publish the GDP data on May 16 at 8:50am (2350 GMT, May 15).

MACHINERY ORDERS, CORE CPI

The poll also predicted machinery orders fell 3.0 per cent in March from the previous month, when they grew 2.1 per cent. The highly volatile data series is regarded as an indicator of capital spending in six to nine months.

It would be the first decline in three months after a 2.1 per cent growth in February and a 8.2 per cent jump in January.

Still, machinery orders likely rose for the third straight quarter in Jan-March versus the previous quarter, analysts say.

"Capital spending is staying solid despite the bearish tone of domestic and overseas economies and it will likely retain its positive movement," said an analyst at SMBC Nikko Securities in the survey.

The machinery order data will be released at 8:50am on May 17.

The poll also found the core consumer price index (CPI), which includes oil products but excludes volatile fresh food prices, rose 0.8 percent in April from a year earlier, a touch less than the 0.9 per cent gain seen in March.

Core CPI is due out at 8:30am on May 18.

The Bank of Japan's corporate goods price index (CGPI), which measures the prices companies charge each other for goods and services, likely grew 2.0 per cent in April.

The annualised contraction would translate into a flat reading from the previous quarter.

Japan's economy is expected to have contracted for the first time in two years in the first quarter due to weak private consumption and softer export demand, a Reuters poll showed on Friday. A negative reading, while slight, would snap Japan's longest period of economic expansion - eight straight quarters of growth - since its 1980s bubble economy. But analysts said the expected January-March weakness may be only a temporary soft patch, arguing that higher prices for fresh vegetables and bad winter weather likely weighed on consumer spending in the quarter. The global economy also has remained firm, suggesting Japan will regain traction in the second quarter, they added. Gross domestic product (GDP) probably shrank at an annualised rate of 0.2 per cent in the first quarter after a 1.6 of expansion in the final quarter of 2017, the poll of 18 analysts showed. That would mark the first contraction in the world's third-largest economy since late 2015. The annualised contraction would translate into a flat reading from the previous quarter. "The economy had steadily recovered but it appeared to have come to a temporary standstill," said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute. "Economic indicators such as factory output and firms' business sentiment have shown a softening momentum of the economy. The GDP data will likely reflect those moves." Analysts believe there was no growth in private consumption in the quarter, after a 0.5 per cent gain in the final quarter last year. Private consumption accounts for 60 per cent of GDP. External demand - or exports minus imports - also provided no contribution to GDP, the poll found. Japan's exports rose less than expected in March and a business survey showed export order growth slowed sharply in April due to a stronger yen. Capital spending was forecast to rise 0.4 per cent in the quarter, slowing from a 1.0 per cent increase in the previous period but still up for a sixth straight quarter. "The economy is expected to return to the pace of around annualised 1.0 per cent growth from April-June but we need to pay attention to impacts from the United States' trade protectionism including the currency movements," said Yusuke Ichikawa, senior economist at Mizuho Research Institute. The Cabinet Office will publish the GDP data on May 16 at 8:50am (2350 GMT, May 15). MACHINERY ORDERS, CORE CPI The poll also predicted machinery orders fell 3.0 per cent in March from the previous month, when they grew 2.1 per cent. The highly volatile data series is regarded as an indicator of capital spending in six to nine months. It would be the first decline in three months after a 2.1 per cent growth in February and a 8.2 per cent jump in January. Still, machinery orders likely rose for the third straight quarter in Jan-March versus the previous quarter, analysts say. "Capital spending is staying solid despite the bearish tone of domestic and overseas economies and it will likely retain its positive movement," said an analyst at SMBC Nikko Securities in the survey. The machinery order data will be released at 8:50am on May 17. The poll also found the core consumer price index (CPI), which includes oil products but excludes volatile fresh food prices, rose 0.8 percent in April from a year earlier, a touch less than the 0.9 per cent gain seen in March. Core CPI is due out at 8:30am on May 18. The Bank of Japan's corporate goods price index (CGPI), which measures the prices companies charge each other for goods and services, likely grew 2.0 per cent in April.

Japan economy seen shrinking for first time in two years in first quarter

Japan has posted its longest economic expansion in over a decade on the back of a pickup in household and company spending, data showed Monday.&nbsp;

The country&#39;s Gross Domestic Product grew by 1.0 per cent in the April-June period, marking the sixth straight winning quarter in the longest string of gains since 2006.

The world&#39;s number three economy has been picking up steam, mainly on the back of a surging exports including smartphones parts and memory chips, with investments linked to the Tokyo 2020 Olympics also giving growth a boost.

But the latest GDP figures -- which translate into a &nbsp;whopping 4.0 per cent annualised growth rate -- were driven by robust domestic demand and capital spending, which offset a quarterly decline in exports.

Private consumption picked up 0.9 per cent in the second quarter. Individual spending accounts for more than a half of Japan&#39;s GDP.

The second quarter growth blew past market expectations for a 0.6 per cent rise, according to figures from the Cabinet Office. It was well up from a 0.4 per cent expansion in January-March GDP.&nbsp;

The labour market is tight and business confidence is high but efforts to lift inflation have fallen flat despite years of aggressive monetary easing by Japan&#39;s central bank.

The latest reading nonetheless means Japan&#39;s economy has had its best string of gains since the tenure of popular former prime minister Junichiro Koizumi.

Monday&#39;s figures are good news for the current prime minister Shinzo Abe -- whose brief and underwhelming first term as Japan&#39;s premier came directly after Koizumi.

A string of short-term leaders followed Abe&#39;s first term before he swept back to power in late 2012 on a pledge to reignite Japan&#39;s once-booming economy with a plan dubbed Abenomics.

The scheme -- a mix of huge monetary easing, government spending and reforms to the economy -- stoked a stock market rally and fattened corporate profits.

&#39;Tailwind for Abenomics&#39;

Some critics have cast doubt on the plan, as heavily indebted Japan grapples with low birthrates and a shrinking labour force.

Abe has seen his public support ratings plummet in the past few months over an array of political troubles, including allegations of favouritism to a friend in a business deal.

&quot;This is a good result and tailwind for Abenomics,&quot; Shinke Yoshiki, chief economist at Dai-ichi Life Research Institute, said of Monday&#39;s data release.

&quot;Consumption and corporate investment are particularly strong, a result of brisk corporate earnings and improved business confidence.&quot;

In a commentary, Barclays said: &quot;The strength of private consumption reflects an improvement in employment and income conditions (eg, drop in unemployment, four consecutive years of increasing base pay), but likely also such factors as favourable weather during that period.&quot;

Still, wages have not been rising enough to kickstart tepid inflation, and few analysts expect the same kind of growth next quarter.

&quot;Japan&#39;s structural problems have not changed: ageing population, decreasing working age population, deteriorating fiscal conditions,&quot; said Junko Nishioka, chief economist of Sumitomo Mitsui Banking Corp.

Japan has been struggling to defeat years of deflation and slow growth that followed the collapse of an equity and property market bubble in the early nineties.

The Bank of Japan, aiming to create two-per cent inflation as a key part of Tokyo&#39;s growth bid, now expects to reach that goal by sometime in the year to March 2020 -- four years later than planned.

Falling prices can discourage spending by consumers, who will postpone purchases until prices drop more or look to save money instead.

That puts pressure on businesses, creating a cycle in which firms then cut back on expanding production, hiring new workers or boosting wages.

The Japanese economy grew for the sixth successive quarter

Japan has posted its longest economic expansion in over a decade on the back of a pickup in household and company spending, data showed Monday. The country's Gross Domestic Product grew by 1.0 per cent in the April-June period, marking the sixth straight winning quarter in the longest string of gains since 2006. The world's number three economy has been picking up steam, mainly on the back of a surging exports including smartphones parts and memory chips, with investments linked to the Tokyo 2020 Olympics also giving growth a boost. But the latest GDP figures -- which translate into a whopping 4.0 per cent annualised growth rate -- were driven by robust domestic demand and capital spending, which offset a quarterly decline in exports. Private consumption picked up 0.9 per cent in the second quarter. Individual spending accounts for more than a half of Japan's GDP. The second quarter growth blew past market expectations for a 0.6 per cent rise, according to figures from the Cabinet Office. It was well up from a 0.4 per cent expansion in January-March GDP. The labour market is tight and business confidence is high but efforts to lift inflation have fallen flat despite years of aggressive monetary easing by Japan's central bank. The latest reading nonetheless means Japan's economy has had its best string of gains since the tenure of popular former prime minister Junichiro Koizumi. Monday's figures are good news for the current prime minister Shinzo Abe -- whose brief and underwhelming first term as Japan's premier came directly after Koizumi. A string of short-term leaders followed Abe's first term before he swept back to power in late 2012 on a pledge to reignite Japan's once-booming economy with a plan dubbed Abenomics. The scheme -- a mix of huge monetary easing, government spending and reforms to the economy -- stoked a stock market rally and fattened corporate profits. 'Tailwind for Abenomics' Some critics have cast doubt on the plan, as heavily indebted Japan grapples with low birthrates and a shrinking labour force. Abe has seen his public support ratings plummet in the past few months over an array of political troubles, including allegations of favouritism to a friend in a business deal. "This is a good result and tailwind for Abenomics," Shinke Yoshiki, chief economist at Dai-ichi Life Research Institute, said of Monday's data release. "Consumption and corporate investment are particularly strong, a result of brisk corporate earnings and improved business confidence." In a commentary, Barclays said: "The strength of private consumption reflects an improvement in employment and income conditions (eg, drop in unemployment, four consecutive years of increasing base pay), but likely also such factors as favourable weather during that period." Still, wages have not been rising enough to kickstart tepid inflation, and few analysts expect the same kind of growth next quarter. "Japan's structural problems have not changed: ageing population, decreasing working age population, deteriorating fiscal conditions," said Junko Nishioka, chief economist of Sumitomo Mitsui Banking Corp. Japan has been struggling to defeat years of deflation and slow growth that followed the collapse of an equity and property market bubble in the early nineties. The Bank of Japan, aiming to create two-per cent inflation as a key part of Tokyo's growth bid, now expects to reach that goal by sometime in the year to March 2020 -- four years later than planned. Falling prices can discourage spending by consumers, who will postpone purchases until prices drop more or look to save money instead. That puts pressure on businesses, creating a cycle in which firms then cut back on expanding production, hiring new workers or boosting wages.

Japanese economy posts longest expansion in over a decade

Japan has posted its longest economic expansion in over a decade, government data showed Thursday, marking a win for Tokyo&#39;s growth bid even though its battle to conquer deflation is still far from won.

The world&#39;s number three economy grew 0.5 per cent in the first quarter -- or an annualised 2.2 per cent.&nbsp;

That was the fifth straight rise and up from a 0.3 per cent expansion in the last quarter of 2016.

Japan&#39;s prospects have been improving on the back of strong exports, with investments linked to the Tokyo 2020 Olympics also giving the economy a shot in the arm. The labour market is tight and business confidence is strong with firms investing more.

But consumer spending remains tepid and efforts to lift inflation have fallen flat despite years of aggressive monetary easing by Japan&#39;s central bank.&nbsp;

Private consumption picked up a modest 0.4 per cent in the first quarter from zero growth in the previous three months. Individual spending accounts for more than a half of Japan&#39;s GDP.

&quot;I can&#39;t give the &#39;all clear&#39; yet,&quot; said Takeshi Minami, chief economist at Norinchukin Research Institute in Tokyo.

&quot;Public works spending is helping prop up growth this year but it&#39;s tough to imagine that private spending is going to be a driving force for the economy.&quot;

Longest in a decade&nbsp; 
 
The latest reading nonetheless means Japan&#39;s economy has had its longest string of gains since 2006, during the tenure of popular former prime minister Junichiro Koizumi.

The figures are good news for the current prime minister Shinzo Abe -- whose brief and underwhelming first term as Japan&#39;s premier came directly after Koizumi.

A string of short-term leaders followed before Abe swept back to power in late 2012 on a pledge to reignite Japan&#39;s once-booming economy with a plan dubbed Abenomics.

The scheme -- a mix of huge monetary easing, government spending and reforms to the economy -- stoked a stock market rally and fattened corporate profits.&nbsp;

But there has been growing criticism about the plan&#39;s muted impact on the wider economy.

Still, the Bank of Japan and International Monetary Fund both recently lifted their projections for the country&#39;s growth rate.

A weak yen has helped prop up the economy as it makes Japanese exports more competitive and inflates profits when firms repatriate their foreign-earned income.

An improving global outlook with strong demand for Japanese smartphone parts, memory chips and construction machinery has also been a tailwind, analysts said.

&quot;With growing external demand set to continue, we believe there will be the need for many companies to replace machinery and equipment,&quot; Katsunori Kitakura, lead strategist at asset manager Sumitomo Mitsui Trust Group, said before Thursday&#39;s GDP figures were released.

Cash-rich firms have been stingy with pay hikes though, which hurts spending and acts like an anchor on the economy.

In March, some of Japan&#39;s top companies, including Toyota and Hitachi, announced their lowest wage rises in years.

&quot;Wages are still stagnating, despite sharp falls in unemployment,&quot; research house Capital Economics said in a commentary.

&quot;This seems to be because aggressive monetary easing has failed to lift expectations of future price rises among households and firms.

&quot;Unless this changes, the chances of inflation settling at two per cent or higher are slim,&quot; it added.

The Bank of Japan (BoJ), aiming to achieve two-percent inflation as a key part of Tokyo&#39;s growth bid, now expects to reach that goal by 2019 -- four years later than planned.

Despite healthy profits, many Japanese firms remain cautious about the world economy, partly due to worries that US President Donald Trump&#39;s protectionist leanings could hurt exports.

Japan has been struggling to defeat years of deflation and slow growth that followed the collapse of an equity and property market bubble in the early nineties.

Falling prices can discourage spending by consumers, who might postpone purchases until prices drop more or look to save money instead.&nbsp;

That puts pressure on businesses, creating a cycle in which firms then cut back on expanding production, hiring new workers or boosting wages. 
 
(AFP)

 
&nbsp;

The world's No 3 economy has now grown over five straight quarters

Japan has posted its longest economic expansion in over a decade, government data showed Thursday, marking a win for Tokyo's growth bid even though its battle to conquer deflation is still far from won. The world's number three economy grew 0.5 per cent in the first quarter -- or an annualised 2.2 per cent. That was the fifth straight rise and up from a 0.3 per cent expansion in the last quarter of 2016. Japan's prospects have been improving on the back of strong exports, with investments linked to the Tokyo 2020 Olympics also giving the economy a shot in the arm. The labour market is tight and business confidence is strong with firms investing more. But consumer spending remains tepid and efforts to lift inflation have fallen flat despite years of aggressive monetary easing by Japan's central bank. Private consumption picked up a modest 0.4 per cent in the first quarter from zero growth in the previous three months. Individual spending accounts for more than a half of Japan's GDP. "I can't give the 'all clear' yet," said Takeshi Minami, chief economist at Norinchukin Research Institute in Tokyo. "Public works spending is helping prop up growth this year but it's tough to imagine that private spending is going to be a driving force for the economy." Longest in a decade The latest reading nonetheless means Japan's economy has had its longest string of gains since 2006, during the tenure of popular former prime minister Junichiro Koizumi. The figures are good news for the current prime minister Shinzo Abe -- whose brief and underwhelming first term as Japan's premier came directly after Koizumi. A string of short-term leaders followed before Abe swept back to power in late 2012 on a pledge to reignite Japan's once-booming economy with a plan dubbed Abenomics. The scheme -- a mix of huge monetary easing, government spending and reforms to the economy -- stoked a stock market rally and fattened corporate profits. But there has been growing criticism about the plan's muted impact on the wider economy. Still, the Bank of Japan and International Monetary Fund both recently lifted their projections for the country's growth rate. A weak yen has helped prop up the economy as it makes Japanese exports more competitive and inflates profits when firms repatriate their foreign-earned income. An improving global outlook with strong demand for Japanese smartphone parts, memory chips and construction machinery has also been a tailwind, analysts said. "With growing external demand set to continue, we believe there will be the need for many companies to replace machinery and equipment," Katsunori Kitakura, lead strategist at asset manager Sumitomo Mitsui Trust Group, said before Thursday's GDP figures were released. Cash-rich firms have been stingy with pay hikes though, which hurts spending and acts like an anchor on the economy. In March, some of Japan's top companies, including Toyota and Hitachi, announced their lowest wage rises in years. "Wages are still stagnating, despite sharp falls in unemployment," research house Capital Economics said in a commentary. "This seems to be because aggressive monetary easing has failed to lift expectations of future price rises among households and firms. "Unless this changes, the chances of inflation settling at two per cent or higher are slim," it added. The Bank of Japan (BoJ), aiming to achieve two-percent inflation as a key part of Tokyo's growth bid, now expects to reach that goal by 2019 -- four years later than planned. Despite healthy profits, many Japanese firms remain cautious about the world economy, partly due to worries that US President Donald Trump's protectionist leanings could hurt exports. Japan has been struggling to defeat years of deflation and slow growth that followed the collapse of an equity and property market bubble in the early nineties. Falling prices can discourage spending by consumers, who might postpone purchases until prices drop more or look to save money instead. That puts pressure on businesses, creating a cycle in which firms then cut back on expanding production, hiring new workers or boosting wages. (AFP)

Japan economy posts longest expansion in a decade

Confidence in Japanese manufacturers is expected to worsen to zero in the next three months, a Reuters poll found, as Britain&#39;s vote to exit the European Union (EU) further clouded the outlook for Japan&#39;s export-reliant economy. 
 
The Reuters Tankan, which tracks the Bank of Japan&#39;s (BOJ) quarterly Tankan survey, also found the service sector&#39;s mood fell in July to levels last seen in April 2013 when the BOJ embarked on massive monetary stimulus to reflate the economy. 
 
The monthly poll of 534 big and mid-sized firms taken July 1-15, of which 266 responded, offered an early glimpse of Japanese business sentiment in the wake of the Brexit vote, which briefly prompted a sharp Yen gain to below 100 Yen versus the Dollar. 
 
The Reuters Tankan sentiment index for manufacturers was unchanged at 3 in July and was seen worsening to zero in October, dragged down by exporters of cars, electronics, steel and chemicals. 
 
The sentiment indexes subtract the percentage of companies saying conditions are poor from those saying conditions are good. A positive number means optimists outnumber pessimists. 
 
The service-sector index fell to 15 from 17 in June, and was seen unchanged in October, reflecting weak domestic demand. 
 
Bleak business sentiment should add to calls for policymakers to do more to revive a flagging economy, with the government eyeing a stimulus package of 10 trillion Yen ($94.62 billion) or more and the Bank of Japan under pressure to ease policy further. 
 
&quot;We cannot see the future, given the effects of a rapid Yen gain due to Britain&#39;s vote to leave EU,&quot; a manager at a chemicals firm said in the survey, which companies answer anonymously. 
 
&quot;Capital expenditures are being put off because of uncertainty over Europe caused by Britain&#39;s exit from the EU, as well as a slowdown in China&#39;s economy, and currency situations,&quot; a machinery-maker said. 
 
While the safe-haven Yen has fallen to about 105 since last week as global risk aversion abated, manufacturers reported concerns over another possible spike in the Yen because of uncertainty over the global economic outlook. 
 
Last week Prime Minister Shinzo Abe ordered compilation of an economic stimulus package by the end of this month to respond to weak private consumption and investment, and external risks. Speculation also lingers that the BOJ may ease again at its July 28-29 policy review. 
 
(Reuters)

Confidence in Japanese manufacturers, which was steady in July, was seen worsening to zero in October, says a Reuters poll

Confidence in Japanese manufacturers is expected to worsen to zero in the next three months, a Reuters poll found, as Britain's vote to exit the European Union (EU) further clouded the outlook for Japan's export-reliant economy. The Reuters Tankan, which tracks the Bank of Japan's (BOJ) quarterly Tankan survey, also found the service sector's mood fell in July to levels last seen in April 2013 when the BOJ embarked on massive monetary stimulus to reflate the economy. The monthly poll of 534 big and mid-sized firms taken July 1-15, of which 266 responded, offered an early glimpse of Japanese business sentiment in the wake of the Brexit vote, which briefly prompted a sharp Yen gain to below 100 Yen versus the Dollar. The Reuters Tankan sentiment index for manufacturers was unchanged at 3 in July and was seen worsening to zero in October, dragged down by exporters of cars, electronics, steel and chemicals. The sentiment indexes subtract the percentage of companies saying conditions are poor from those saying conditions are good. A positive number means optimists outnumber pessimists. The service-sector index fell to 15 from 17 in June, and was seen unchanged in October, reflecting weak domestic demand. Bleak business sentiment should add to calls for policymakers to do more to revive a flagging economy, with the government eyeing a stimulus package of 10 trillion Yen ($94.62 billion) or more and the Bank of Japan under pressure to ease policy further. "We cannot see the future, given the effects of a rapid Yen gain due to Britain's vote to leave EU," a manager at a chemicals firm said in the survey, which companies answer anonymously. "Capital expenditures are being put off because of uncertainty over Europe caused by Britain's exit from the EU, as well as a slowdown in China's economy, and currency situations," a machinery-maker said. While the safe-haven Yen has fallen to about 105 since last week as global risk aversion abated, manufacturers reported concerns over another possible spike in the Yen because of uncertainty over the global economic outlook. Last week Prime Minister Shinzo Abe ordered compilation of an economic stimulus package by the end of this month to respond to weak private consumption and investment, and external risks. Speculation also lingers that the BOJ may ease again at its July 28-29 policy review. (Reuters)

Japan's business mood falls as Brexit clouds economic outlook

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