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| Japanese economy continues steady rise |
TOKYO, July 16 (Xinhua) -- The Japanese economy continued its track of steady recovery in the first half of 2007. Healthy conditions in exports, domestic consumption and enterprise equipment investment helped maintain the overall economic boom. The International Monetary Fund recently predicted that the country's GDP growth is to stand at 2.3 percent this year.
EXPORT DEPENDENCY ON U.S. MARKET SOFTENS
There has been no much change in Japan's export-dependent economic structure. Although export to the United States declined since early this year due to its slack economy, strong demand from other rising countries and resource-abundant economies contributed to the healthy state of Japan's export.
In the construction machine industry, both Komatsu Ltd. and Hitachi Construction Machinery Co., the No. 2 and No. 3 holders ofthe global market, expected record highs in sales in fiscal 2007, notwithstanding foreseeable sales drop in the U.S. market.
According to a manager of Komatsu Yokohama branch, crazy overseas demand for used Japanese machines lifted the prices closeto that of the new ones. Orders from the Middle East and China have increased in big volume.
Enhanced demand from rising countries offset deficient demand of the U.S. market, said Nobuhiko Kuwahara, a senior official of Hitachi Construction Machinery Co.
The auto industry has been the same way. Statistics released bythe Japan Automobile Manufacturers Association (JAMA) in late Juneshowed that the country's auto exports extended its rise to the 22nd consecutive month in May as that to the U.S. market slipped for the second month.
Driven by exports to countries other than the United States, Japan's domestic auto output also reversed a three-month-long decline ending April, the statistics showed.
According to statistics released by the Japanese government in mid June, exports contributed to more than 60 percent of the rise of economy in the first quarter of the year.
ĦĦĦĦENTERPRISE EQUIPMENT INVESTMENT KEEP RISING
The expansion of enterprise equipment investment could be attributed to rise of profit and increased domestic and overseas demand.
According to data released by the finance ministry, Japanese enterprises' business profit in the first quarter of this year marked a year-on-year rise of 7.2 percent and was the 19th quarterof increase in a row. During the same time, enterprises' equipmentinvestment climbed 2.8 percent from the previous quarter and 14.2 percent from the same period of 2006.
A survey conducted by the Japan Economic News Agency indicated that 96 out of 2,600 listed Japanese enterprises respectively expected pretax profit of 100 billion yen (about 813 million U.S. dollars) in fiscal 2007.
Statistics released by the Bank of Japan showed that major Japanese manufacturers' planned investment on equipment rose for the fifth consecutive year in fiscal 2007.
All of these data made clear that driven by demands from home and overseas, Japanese enterprises' profits and desire for investment both remained at fairly high levels.
INDIVIDUAL CONSUMPTION REVIVES
With the booming of economy and the drop of unemployment rate, Japan's domestic individual consumption has also been in a steady recovery.
The unemployment rate remained low at 3.8 percent in May, according to official data.
Research conducted by the Internal Affairs and Communications Ministry showed that average household consumption in April stood at 316,163 yen (about 2,570 dollars). It climbed 1.1 percent from the same period last year and was the fourth consecutive month on the rise. Analysts believed that the optimistic employment situation and the rising income of employees will further contribute to the tendency in a modest way.
The Japanese government said in mid June that the country's GDP growth remained at the high level of 3.3 percent in the first quarter of the year, and may stay at 1-1.5 percent in the second quarter. Taking that of the second half of the year into consideration, it predicted the average growth in 2007 at 2 percent.
However, the Japanese economy is still menaced by such uncertain factors as rising crude oil price and long period interest rate change. In order to guarantee a longer steady recovery, the Japanese government and the central bank have to appropriately deal with and circumvent such risks. It could be a challenging mission.
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