Japan is still strong

Remember what I said about the Nikkei being a buying opportunity?

This is one reason why: Japan's Economy Grows at Fastest Pace in Three Years (Bloomberg):

March 12 (Bloomberg) -- Japan's economy expanded 5.5 percent in the fourth quarter, the fastest pace in three years, as surging exports prompted companies to increase spending on factories and machinery.         

Growth in the world's second-largest economy exceeded the government's initial 4.8 percent estimate in the three months ended Dec. 31, the Cabinet Office said today in Tokyo. The result was more than the 5.1 percent median forecast of 23 economists surveyed by Bloomberg News.         

``Japan's economy is solid and will keep expanding, driven by a solid corporate sector,'' said Takuji Aida, chief economist for Japan at Barclays Capital in Tokyo. ``The economy is likely to exceed at least its potential growth rate of 1.8 percent in the first quarter.''

I will get around to expounding the Japanese argument, but suffice it to say for now this is a great zone for foreign investment, principally because it's a great bridge between Chinese and U.S. growth.

It's the economy most of us have been longing for - pretty stable U.S-style fundamentals (especially given that lots of the accounting discrepancies have been ironed out since the early-90's debacle) with immediate access to Asia's boom-bust market sex-appeal.

Comments

[Brainy]

That article is missing the point that the growth in Japan's economy is not so much a product of the traditional surge in exports, as it is more so a product of 1) continued strong private investment (NOT necessarily prompted by growing exports) and 2)consumer spending.

Exports have been on decline, AND Japan's economy only appeared weaker largely due to decreased government spending at the local and national levels (it's part of a movement to have a smaller government).