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Japan economy: Exports help faster-than-expected growth

Gross domestic product rose at an annualised rate of 2.2% in the three months to September, the third consecutive quarter of expansion.

Japanese firms have relied on overseas sales to make up for lacklustre domestic demand.

There are concerns a Donald Trump US presidency will hurt Japan if anti-free trade rhetoric became a reality.

But since the election result, the yen has fallen against the dollar. That makes Japanese goods cheaper abroad, which is good news for the country’s exporters.

The latest official data showed the world’s third-largest economy expanded by 0.5% compared with the three months to June – better than the forecast of 0.2% growth.

Export reliance

Japanese Prime Minister Shinzo Abe at a press conference in TokyoImage copyrightGETTY IMAGES
Image captionIs ‘Abenomics’ no longer working?

It was some rare good news for Prime Minister Shinzo Abe’s projects to help stimulate the economy – dubbed Abenomics.

However, analysts said this pace could not be sustained given Japan’s reliance on exports.

“Consumption is barely there, and in capital expenditure there no growth … so Japan is relying very much on the outside,” Takuji Okubo, chief economist of Japan Macro Advisers, told the BBC.

And Kohei Iwahara, an economist at Natixis Japan Securities, said the figures could be a “one-off windfall”, predicting a slowdown in the last three months of 2016.

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In August, Japan’s cabinet approved an economic stimulus package worth more than 28 trillion yen ($275bn; £207bn) – Mr Abe’s latest attempt to boost growth through spending.

However economists were largely disappointed with both its scope and likely impact.

And last month Japan’s central bank again pushed back the timeline for hitting its 2% inflation target to March 2019 – a move that raised more questions about the country’s economic recovery.

Read more at BBC

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