Meanwhile, in Japan…

According to this Bloomberg story:

Japan’s economy grew faster than previously estimated in the second quarter, aiding Prime Minister Shinzo Abe’s reflation campaign as he considers whether the nation can withstand a sales-tax increase.

Gross domestic product expanded an annualized 3.8 percent from the first quarter, higher than an initial estimate of 2.6 percent, reflecting stronger private capital investment, the Cabinet Office said in Tokyo today. The median forecast of 23 economists surveyed by Bloomberg News was for a 3.9 percent increase. The economy grew 4.1 percent in the first quarter.

The sales tax is set to rise to 8 percent in April from 5 percent now, and then increase to 10 percent in October 2015, pending a final decision by Prime Minister Shinzo Abe.

Japanese stocks jumped and the yen weakened after Tokyo won a bid to host the 2020 Olympics, helping Abe’s effort to revive the world’s third biggest economy. Analysts from Fujitsu Research Institute to UBS AG said a sales tax increase in April is now a “done deal,” putting the focus on how much stimulus policy makers will apply to offset the blow to consumption and growth.

For the ‘intuition’ see this post by Lars: “There is no ’fiscal cliff’ in Japan – a simple AS-AD analysis

One thought on “Meanwhile, in Japan…

  1. Let us hope the Bank of Japan shows real resolve and does not quaver in the years ahead. Japan needs many years of robust growth and moderate inflation.

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