Japan's economic growth forecasts have been revised upwards as the recovery gathers steam.
Bulging demand has pushed estimates to 6.1% for the full year, up from the previous estimate of 5.6%.

Gross Domestic Product (GDP) grew 1.5%, in real terms, in the first quarter up from the previous estimate of 1.4%.

Japan is the world's second biggest economy and now looks set to outstrip US growth of 4.4% annualised for the same period of January-March.

It is welcome news for Prime Minister Junichiro Koizumi, attending the G8 summit, as he faces another election in just a few weeks time.

Mr Koizumi returned to power with a majority government in November's general election and now faces upper-house elections in July, which could make or break his current second-term premiership.

Boost

A strong economy in Japan was also welcomed by President Bush attending the G8 summit.

Showering Mr Koizumi with praise Mr Bush said, "The first thing, of course, I will do is congratulate him on the fact that the Japanese economy is improving under his leadership."

In a meeting between the two leaders Mr Koizumi claimed the recovery in Japan was a result of his policy of "no growth without reforms".

His administration has made reforms at government agencies and urged the same at private-sector firms since Mr Koizumi took office three years ago.

China factor

The wider picture reveals that Japan also owes its change of fortune to booming export demand from China and other fast-growing countries in the region.

Recent industrial output figures showed a 3.3% rise in April compared to March and reinforced hopes that the recovery is sustainable.

Japan's economic growth hit a 13-year high in the last quarter of 2003.


http://news.bbc.co.uk/1/hi/business/3789455.stm

We will see what happens in the coming months.

Japan has a gigantic debt that will make it really hard for Japan to fully recover within our lifetimes. In terms of debt, Japan used to be a "Aaa" country along with America, England, Australia, Canada, Singapore, Germany, and France but Japan has fallen over the recent years to "Aa1" --> "Aa2" --> "Aa3" --> "A1" --> "A2" Here are some other countries in the "A2" rank: Israel, Greece, South Africa. "A1" includes Czech republic and Botswana. "Aa3" includes Hong Kong and Taiwan. "Aa2" includes Italy and Portugal. "Aa1" is Belgium. The rank below Japan's, "A3", includes Korea, Macao, and Malasia. So Japan in terms of debt paying has fallen down to this level. We're just barely above Malasia, Korea, and Macao. Where the hell is Macao anyway?

We have many problems in our government. The prefectural governments are spending money inefficiently and so is the national government. It is surprising how the Japan government hasn't fallen into Chapter Eleven yet. And as Japanese population dwindles and the ration between the old to the young gets bigger, there are going to be less people paying back that debt but the debt will get larger because of social security pensions and paid health care.

Not to mention corruption sucking up our precious taxes. Foreign nations like China using our money to fund their space program and weapons of mass destruction.

Sure, GDP may be going up but that is not the only indicator of growth. The three main goals of macroeconomics is to promote growth, development, and full employment. Japan may be growing but it is not being distributed equitably. There is NO development going on in Japan, in fact the quality of life of Japanese is going down for many people. There is definitely no full employment. People have been without jobs for years now.

Japanese improvement in the economy calls for a major revolution in the Japanese structure.

I would like to congradulate japan.

I myself have no problem with japan having a strong economy because it also gives up a better economy.

Heh, it seems to me that Malaysia is experiencing the same thing more than 2 weeks ago.

A local newspaper reported that our economic growth demand went up by 5.6%.

It is just me or is it have to do with the oil prices that the U.S market had raised ?

What is this Aaa and Aa1 system you are referring to barker? I can't see how the US can be considered an Aaa when it has the highest debt in the world.

HEH, I watch Japanese, Hong Kong, Shanghai, Sumjun, American, Taiwanese economies EVERYDAY (except on weekends)

When HK ^HSI drops down along with US (because HKD is pegged to USD), Japan Index drops hilariously low, and it gains mildly in the past weeks.

Japanese economy is far from booming. Shanghai econmy gains double digits, and the Value of Gold has risen.

The system I'm referring to is not the AMOUNT of debt, it is debt repayment. Also, the soundness of the government bond. For example, Argentina recently lost its credibility because it failed to repay its debts in time. They have an extremely low ranking. America has a high rank because American bonds are very sound. You are sure that your money will come back if you loan money to the US government. Japan is starting to lose its credibility and soundness. Also, Japan does have too much debt considering the the population and size of the country and the amount of spending Japan actually does. America actually spends a lot so it has large debts. Japan just doesn't pay back enough at a time.

Here is what http://www.dls.state.ma.us/MDMSTUF/Debt_Ot...s/moodybond.xls has to say about Moodies Investors Service Indices:

Aaa:
Bonds that are rated Aaa are judged to be of the best quality. They carry the smallest degree of investment risk and are generally referred to as “gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position
of such issues.

Aa:
Bonds that are rated Aa are judged to be of high quality by all standards. Together with the Aaa group they comprise what are generally known as high-grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risks appear somewhat larger than in Aaa securities.

A:
Bonds that are rated A possess many favorable investment attributes and are to be considered as upper medium-grade obligations. Factors giving security to principal and interest are considered adequate, but elements may be present which suggest a susceptibility to impairment some time in the future.

Baa:
Bonds that are rated Ba are judged to have speculative elements; their future cannot be considered as well assured. Often the protection of interest and principal payments may be very moderate, and thereby not well safeguarded during both good and bad times over the future. Uncertainty of position characterizes the bonds in this class.

B:
Bonds that are rated B generally lack characteristics of the desirable investment. Assurance of interest and principal payments or maintenance of other terms of the contract over any long period of time may be small.

The bonds in the Aa, A, Baa, Ba and B, groups which Moody’s believes possesses the strongest investment attributes are designated by the symbols Aa1, A1, Baa1, Ba1, and B1. In 1997, Moody’s started to rate new public finance issues using expanded bond rating symbols to include modifiers 2 and 3 to the existing Numerical 1. The modifier 2 indicates that the issue is in the mid-range of its category and the modifier 3 indicates that it is in the low end.

Caa:
Bonds that are rated Caa are of poor standing. Such issues may be in default or there may be present elements of danger with respect to principal or interest. Ca Bonds that are rated Ca represent obligations
which are speculative in a high degree. Such issues are often in default or have other marked shortcomings. C Bonds that are rated C are the lowest rated class of bonds, and issues so rated can be regarded as having extremely poor prospects of ever attaining any real investment standing.

Here's the list of other country's rankings as of April 16, 2004. The point of interest is the second column. http://www.geocities.com/elklandestino/SovRatList.pdf

I agree.