The economy of Japan expanded for the longest period since the 1980s during the past couple of months and quarters due to the growing consumer spending in the country pushing Japanese Prime Minister Shinzo Abe to proceed with his plan in being able to work on the recovery of the economy from years of lack in activity.

The economy’s long expansion would serve as a positive sign for the Bank of Japan of the economy finally picking up and recovering in able to push consumer prices near its target of a two percent inflation rate.

From the three months that followed in December last year, Cabinet Data revealed that the economy of Japan has recorded an expansion of 0.5% in an annualized rate which is smaller than the median estimate of 0.9% in annualized growth from an annualized price increase of 2.2% in July to September.

Japan whose economy is currently the third largest in the world was initially predicted to expand by 0.9% with quarterly growth expected to come at around 0.1% to 0.2%. The recovery of the Japanese economy was also attributed to the International Monetary Fund’s estimated report that the global economy is due to rise by 3.9%.

The U.S. tax overhaul is also expected to benefit the economy of Japan as the U.S. gets a boost from the recent bill passed by the White House.

Economists have commented on the recent growth of the country in terms of their economy and stated that the growth rate for 2018 may well exceed the current potential of the economy as well as the expectations of the public.


However, some have warned that the Bank of Japan may not take any action despite the recent upward movement of the Yen in the middle of a volatile financial market that affects the confidence of the market in Japan.

On Wednesday, the U.S. dollar declined to a fifteen-month low against the Japanese yen as the markets awaited the release of the inflation report in the United States which would offset the recent movement and sentiments of the global market. A stronger Japanese yen would also result in lower import prices in the country and affect the earnings of exporting companies negatively.

Currently, the market took the decision of Prime Minister Abe to nominate Haruhiko Kuroda as the Bank of Japan governor for the second time as a sign of the currently loose monetary policy in the country being kept as it is at the moment. However, risks such as the recent real wages have lost 0.4% during the fourth quarter making its first decline since the past three quarters.

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