Japan economy rebounds in first quarter on firm consumption

Japan's economy grew 1.0 percent in January-March from the previous quarter, powering ahead of other major industrial nations thanks to rebuilding of the tsunami-battered northeast, solid private spending ...

Economists predicted an end to the recession in Japan. However, economists were wrong again as Japan fourth-quarter GDP shows economy still in recession Japan's economy contracted for the third consecutive quarter in October-December, showing the country is struggling to escape from a mild recession and adding weight to the new government's push for radical policy steps to revive growth.

Japan's 4th Quarter GDP Unexpectedly Contracts at 2.3% Annualized Rate The Financial Times reports Japan’s GDP shrinks in fourth quarterFebruary 13, 2012 Japan’s economy shrank for the third time in four quarters between October and December, after floods in Thailand damaged production, and a strong yen and subdued overseas demand hurt exports.

Revised estimates of Japan's growth have been cut in half, from 1.4% to .7%. More importantly, Japan has a small but shrinking current account surplus (in spite of running a trade deficit for some time). Once the current account surplus vanishes, and I believe it will, Japan will become somewhat dependent on foreigners to handle its budget deficit. Good luck with that at 0% interest rates.

The economic news coming out of Japan is not heartening.   The world’s third-largest economy has entered a technical recession after contracting for two straight quarters, revised official data showed last month.   Analysts believe economic conditions probably worsened in the current quarter due to collapsing exports to China and the European Union, falling domestic auto sales and decelerating post-tsunami reconstruction spending.   But the negative news doesn’t end there.  

TOKYO (Reuters) - Incoming Japanese Prime Minister Shinzo Abe kept up his calls on Tuesday for the Bank of Japan to drastically ease monetary policy by setting an inflation target of 2 percent, and repeated that he wants to tame the strong yen to help revive the economy.

Bold monetary easing is essential in beating deflation and a strong yen TOKYO — Japanese Prime Minister Shinzo Abe made his biggest push yet to make jobs growth part of the Bank of Japan’s mandate as his government approved US$117 billion of spending to revive the economy in the biggest stimulus since the financial crisis.