Japan's economy returns to growth in Q2

Japan's economy returns to growth in Q2

Japan's economy returns to growth in Q2

But analysts warned that US-led trade wars could be a major risk factor for an economy still struggling to win a long battle against deflation.

The world's third-largest economy grew 0.5 percent quarter-on-quarter in the April-June period, compared with a 0.2-percent decline in January-March, the Cabinet Office said.

According to Friday's data, private consumption - which accounts for some 60 per cent of Japan's GDP - rose 0.7 per cent, recovering from a 0.2-per cent decline in the first quarter.

Business investment jumped 1.3 percent following a 0.5 percent gain in the previous quarter, thanks partly to booming construction ahead of the Tokyo Olympics in 2020.

Mizuho Research Institute senior economist Kentaro Arita said that the United States tariffs could cost Japan's auto industry as much as US$10 billion. He predicted that "activity will remain sluggish for now". We are quite certain there will be some sort of tariffs on Japanese cars.

In addition, Japan's ongoing recovery is increasingly causing labor shortages worsened by a rapidly ageing population.

Aston Villa sign Scotland midfielder John McGinn from Hibernian
He helped the club earn promotion back to the Premiership and found his way into the Scotland squad. I've already visited Villa Park and the training ground and the set-up is incredible.

Chart showing quarterly growth in Japan.

That exceeded expectations for an increase of 0.3 percent following the 0.2 percent loss in the three months prior. "If Washington imposes higher auto tariffs, its impact on Japan's auto industry would be significant". "The signs point to a slower pace of overall growth".

The United States has pressured Japan for a bi-lateral free-trade agreement as a way to lower the USA trade deficit.

The two countries failed to reach any consensus in talks on Thursday between US Trade Representative Robert Lighthizer and Japanese Economy Minister Toshimitsu Motegi, who stuck to Tokyo's position that it preferred multilateral free-trade agreements over bilateral ones.

"The pace of the global economic growth, except that of the US, is slowing down but it is still expanding, so Japan's exports will likely pick up as well", said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute.

Trump is trying to re-negotiate the United States trade relationship with other countries to curb practices that he says are unfair to American companies and workers.

Recommended News

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.