Japan looking up

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    With the US suffering in the hands of their fundamentalist leadership, it's a relief the Japs are coming back into upside. Asia looks healthier than Europe which looks healthier than the poor old US.

    Japan economy gets surprise boost
    Tuesday, September 24, 2002 Posted: 10:16 AM HKT (0216 GMT)

    TOKYO, Japan (Reuters) -- Japanese economic activity grew in July, overturning forecasts that it had run out of steam after a stronger-than-expected second quarter, data from the Ministry of Economy, Trade and Industry showed Tuesday.

    The ministry's all-industries index, widely regarded as a close proxy to gross domestic product (GDP), rose by 0.2 percent in July from the previous month on a seasonally adjusted basis.

    That in turn built on a 0.2 percent gain in the three months to June.

    The July figures, which compare with a median forecast for a 0.5 percent decline in a Reuters poll of 15 economists last week, showed Japan's economy had yet to stall after clawing out of its longest postwar recession in the second quarter.

    Among the biggest surprises, the tertiary-sector index, comprising mainly the services industry, rose by 0.3 percent from the previous month, beating a consensus forecast for a 0.7 percent drop.

    'Unexpectedly strong'
    "It was unexpectedly strong," Minako Iida, an economist at Deutsche Securities in Tokyo, said of the all-industries index.

    "The near-term picture is not too bad, with the trend in production suggesting some more gain in August."

    Rises in industrial output and construction also helped buoy the all-industries index, the ministry said.

    The all-industries index has gained weight as a gauge of overall economic growth after a recent overhaul of the calculation process for the government's initial GDP estimates.

    Supply-side figures
    The new GDP estimates focus more on supply-side figures such as retail sales and industrial output, as opposed to the previous formula focusing on demand-side figures such as household spending and a corporate capital spending survey.

    April-June GDP grew from a quarter earlier at an annualized rate of 2.6 percent, the first expansion for the world's second-largest economy in five quarters.

    Most economists have said they expect a slight pullback in the July-September quarter, with slowing global growth and the yen's rise this year putting a brake on Japanese exports.

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