Japanese economy performs better in Q2

| August 15, 2011 | 0 Comments

Japan’s economy performed better than in expected in the second quarter, suggesting the country is slowly recovering after the earthquake and tsunami, which struck in March.

According to the Cabinet Office, the economy contracted by 0.3% in the April to June period – less than the 0.7% expected by analysts.

On an annual basis, meanwhile, the economy shrank by 1.3% in the three-month period – again lower than the 2.6% which was widely expected.

The Japanese economy, which is the world’s third largest, emerged from recession in the second quarter of 2009 – much sooner than many other economies – driven by export demand.

However, the twin disasters impacted negatively on growth and hurt exports so the economy was pushed back into recession in the first quarter of the year.

The definition of a recession is two consecutive quarters of negative growth.

The economy continues to face headwinds due to its strong yen and a slowdown in global growth.

Following today’s figures, the yen rose further against the US dollar. The Government has already intervened in the currency markets to weaken the yen.

A strong yen weakens demand for exports as it makes Japanese goods more expensive in foreign markets.

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