Member Article

Second quarter Japanese growth slows

Economic growth in Japan in the second quarter of 2012 is only half the original estimate given.
Initial estimated growth of 1.4% was revised downwards to just 0.7% between April and June, with
a variety of factors behind the new figures. Japan is still dealing with the problems that came after
the earthquake and subsequent tsunami and nuclear disaster of March 2011, while the performance
of its traditionally strong export sector has been poor in recent years because of low demand from
home and abroad.

The Japanese export sector has performed poorly due to a fall in demand from key markets in
the United States and the Eurozone, while the domestic market for Japanese goods is also weak.
However, this forms only part of the picture, as slow growth in Asia, especially in the emerging
economic powerhouses of China and India is also having a knock-on effect on the economy of Japan.
This goes some way towards explaining why growth estimates were halved for the second quarter.

Slow growth is likely to continue unless the overall picture for the export sector and consumer
confidence starts to grow more consistently. However, there may be some good economic news
on the way for construction, as there may be the prospect of rebuilding work being done in areas
affected by the earthquake, nuclear disaster and tsunami of last year. Although it’s uncertain how
much reconstruction will actually take place, it’s possible that it could play an important role in
stimulating long-term economic growth in Japan.

Find up to date information on Japan’s Stock Market and CFD trading strategies at City Index.

This was posted in Bdaily's Members' News section by Jonny Marshall .