Why Japan’s economy is growing again

Scott Tong Aug 17, 2009
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Why Japan’s economy is growing again

Scott Tong Aug 17, 2009
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TEXT OF INTERVIEW

Steve Chiotakis: Japan is showing signs of life again. The second largest economy in the world — after ours — is once again growing. That’s after four nightmare quarters of contraction. And Marketplace’s Asian correspondent Scott Tong joins us live this morning from our bureau in Shanghai. Hi Scott.

Scott Tong: Good morning Steve.

Chiotakis: So what’s the number?

Tong: 0.9 percent — that’s how much the Japanese economy expanded this last quarter. And if it doesn’t really excite you, I should tell you that the economy contracted by 11.7 percent in the previous quarter. So at least the pie is starting to expand a little bit in Japan. A big part of the story is exports are up. A lot of made in Japan stuff goes to China and other Asian countries. So you have some sense, a couple signs, that Asia is starting to do better. You combine that with better news out of European economies and you start to talk about global recovery, Steve.

Chiotakis: And not much room for any kind of good news outlook, you know, looking forward?

Tong: Well we don’t want to get too ahead of ourselves. The market’s expected Japan to do even better than it did today, so the stocks aren’t doing too well today. Japanese businesses are not too confident either. There’s not much sign that they’re spending on new factories and new equipment. The job situation isn’t getting much better in Japan. And the question that faces Japan and a lot of other economies is: OK, we have a stimulus package that juiced this economy, what happens when it wears off? So we’ve had a lot of false positives out of Japan the last couple of decades, and so we need to be cautiously optimistic, I suppose Steve.

Chiotakis: And there’s an election coming up, right?

Tong: Well tomorrow. A big parliamentary election. And the ruling liberal, Democratic party — if you believe the polls — is about to get booted. So at least they can chalk this up and hold up the newspaper in the morning and say, see, you know things are turning around. Keep us in.

Chiotakis: All right. Marketplace’s Asian correspondent Scott Tong joining us live from Shanghai. Scott, thanks.

Tong: OK. Thanks.

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