On The Japanese Trade Deficit

I'm trying to think about the implications of the economic fundamentals driving Japan's 'sustainable recovery'. What we know is that as the population ages the labour market is tightening. This is pushing up wages but not productivity. There is a consequential 'bounce' in domestic consumption. But what happpens next?Well my native economic wits tell me that the relative prices of Japanese imports

Japan Back With The Leaders?

The FT's David Turner had this incredible article in the FT over the weekend (behind the great firewall I'm afraid):Growth puts Japan back with the leadersUnexpectedly strong growth in the last quarter propelled Japan's economy once again into being a world leader, promising an end to 15 years in the doldrums when periodic economic revivals dissolved into false dawns.The world's second biggest

Could This Be The Reason?

As noted in the last post, there has been a noteable movement of foreign investors out of Japan in the last week. Today we have news of a draconian report from the Japanese government Council on Economic and Fiscal Policy which indicates the country either needs major spending cuts or a sharp rise in taxes. When you couple this with the possibility of a steady rise in interest rates and the fact

Japan's Growth Spurt

Well the Japanese economy is certainly ticking along at a very lively clip: an annualised rate of 5.5% in the last quarter of last year. Quite something when you compare it to the somewhat meagre showing of the US economy ver the same period (1.1%). So should we draw the conclusion that the Japanese economy is in better underlying shape than the US one? I doubt it.First of all, there is the nice