Japan Extends Recovery as Exports, Capex Shake off COVID Hit


Japans economy expanded more than expected in the fourth quarter, extending the recovery from its worst postwar recession thanks to a rebound in overseas demand that boosted exports and capital spending.

But the recovery slowed from the third quarters brisk pace and new state of emergency curbs cloud the outlook, underscoring the challenge policymakers face in preventing the spread of COVID19 without choking off a fragile recovery, especially in the battered consumer sector.

Conditions are such that Japan will not be able to avoid negative growth in the first quarter, said Takumi Tsunoda, senior economist at Shinkin Central Bank Research.

There is a high possibility that there will be a repeating cycle of coronavirus infections spreading and being contained this year, which means that consumption is not likely to recover at the expected pace.

The worlds thirdlargest economy grew an annualised 12.7 in OctoberDecember, government data showed on Monday, exceeding a median market forecast for a 9.5 gain.

It was slower than the revised 22.7 surge in the previous quarter, when the economy got a lift from pentup demand after a previous state of emergency was lifted in May.

For the full coronavirusstricken year, Japans economy contracted 4.8, the first annual fall since 2009.

But Japans OctoberDecember performance was stronger than U.S. growth of 4 and a 2.8 slump in the euro zone. With two straight quarters of solid growth, Japans economy likely recouped 90 of…


Please enter your comment!
Please enter your name here