Economic growth lifts mood in Japan

Japan’s economy grew 3.7% at an annual pace in the second quarter, signalling exports were gradually picking up after the nation’s worst recession since the end of the Second World War, the government said today.

Compared to the previous quarter, the world’s second-largest economy expanded 0.9% in April-June from the previous quarter, according to Cabinet Office data.

If that rate were maintained for a full year, Japan’s economy would grow 3.7%.

There has been some hope that Japan’s economy may have hit bottom in the first quarter.

Recent signs have been pointing to a possible rebound in gross domestic product, or the value of a nation’s goods and services.

Japanese manufacturers have benefited from recovering demand in China and other emerging markets. Government stimulus measures have also helped, such as cash handouts and incentives to boost the purchase of ecological products.

Exports grew 6.3% quarter-on-quarter, marking the highest growth since April-June 2002 when Japanese shipments expanded 6.4%.

Kingo Toyoda of the Cabinet Office said the rebound came after Japan’s economy contracted for four consecutive quarters.

“It seems that ecological policies have had some effects,” he told reporters.

Export-dependent Japan was hit hard by the plunge in global demand set off by the US financial crisis.

Major companies such as Toyota Motor Corp and Sony Corp cut thousands of jobs and suspended factory lines. The jobless rate hit 5.4% in June, a six-year high.