Japan heads out of recession

Last week it was announced France and Germany had moved out of recession, and today its reported Japan has seen its economy start to recover after a growth of 0.9 per cent between April and June.

The news of the growth comes after four continuous quarters of a shrinking economy in Japan. Reports indicate the positive news is largely due to a stimulus package put in place by the Japanese government. There is still some uncertainty over whether the growth will continue when the stimulus package comes to an end. Two major European economies also came out of recession in the past week, and Hong Kong has also started to see some growth. This is thought to be a sign the worldwide recession is gradually beginning to ease. Even after the good news, Japan still saw it's share index, the Nikkei, fall because the improved growth was not as good as expected. Japan went into recession last year and growth fell hard as the country's exports suffered the worse. The government's stimulus package included such measures as subsidising the purchase of cars and household goods that are environmentally friendly, as well as handing out cash. The package totalled $260 billion. Japan could still have a rocky road ahead because domestic purchases have not risen significantly. Furthermore, Japan is dependent on exports which have also been suffering. The Japanese economy has been largely affected by the U.S. recession, as Americans continue to spend less. A report issued by the Bank of Japan urged caution regarding the economy. Seijiro Takeshita, a director for the second biggest bank in Japan, Mizuho Financial, told the BBC: "We are definitely getting out of the excessive pessimism that we have been seeing... however, a lot of big questions remain, namely private consumption. We know this time it was good, but that was due to a lot of government stimulus spending."