The growth rate of the economy for the October– December quarter of 2010, in particular, is highly likely to turn out negative following the higher-than-expected growth in the July–September quarter.
However, although the effects of the appreciation of the yen may continue to linger, the economy is expected to return to a moderate recovery path once we enter fiscal 2011, given that – with growth in overseas economies expected to pick up again – exports are projected to continue increasing and firms’ sense of excessive capital stock and labor is likely to dissipate gradually.