Economists say Japan, which has recently ended its zero interest rate policy and appears to have finally won a prolonged battle against deflation, has taken a backseat to China in the region.
“Japan is still bigger than China, but Japan does not drive the East Asian region any more,” Singh says. “China is now the driving economy for the region as a whole.”
Japan’s second-quarter GDP numbers contained no surprises. Real growth data moved from 0.8 percent to 1.0 percent on a quarter-over-quarter annualized basis. Westpac’s Callow forecast overall Japanese growth at about 2.7 percent in 2006, while Northern Trust’s Pressler forecast a 2.5 percent GDP reading for the year.
“Japan is in a little bit of a pickle,” Buskas says. “For years, their economy was mired in deflation and late last year price pressures started to pick up. In July they raised rates for the first time in nearly a decade. But, since then, prices have started to go south again. The data isn’t following through.”
Subscribe to:
Post Comments (Atom)
Post a Comment