Exports have clearly started to increase and production has been recovering. Major factors inducing such positive changes are again external developments including the US economic recovery and the progress of stock adjustment in the IT-related industries. The issue here is whether such positive moves could lead to a sustainable economic recovery.
The Bank of Japan publishes a half-yearly report entitled “Outlook and Risk Assessment of the Economy and Prices”, and the most recent April issue gives the outlook for this fiscal year. As a standard scenario for Japan’ economy for the rest of this fiscal year, the report assumes a recovery led by exports and production, an outlook I still fully endorse.