Japan’s economic expansion may have reached longest in postwar period

January 29, 2019

Tokyo--Japan's economy may have marked its 74th consecutive month of expansion in January, the longest since the end of World War II, the government said Tuesday.

The government sees that the current expansionary period, which started in December 2012, exceeded the "Izanami" boom, previously the longest postwar economic expansion, which lasted 73 months from February 2002 to February 2008.

"The creation of a nondeflationary situation is what makes the current expansion quite different" from the Izanami boom, Economic and Fiscal Policy Minister Toshimitsu Motegi told a press conference after a meeting of economic ministers, highlighting the achievements of economic policies by Prime Minister Shinzo Abe's administration.

But the momentum of the present economic growth is weak compared with the "Izanagi" boom that lasted from November 1965 to July 1970 and the asset inflation-driven boom known as the bubble economy from December 1986 to February 1991. The country's real gross domestic product growth in the current expansion phase stands at 1.2 pct at an annual rate on average, far lower than 11.5 pct during the Izanagi boom and 5.3 pct in the bubble period.

Chief Cabinet Secretary Yoshihide Suga said in a separate press conference, "In order to make the ongoing recovery more certain, the government will surely implement economic measures."

Although wage-related data were recalculated due to recently revealed irregularities in a key labor survey, the revisions did not affect the trend of the economy, said an official of the Cabinet Office.

The peak and trough of a Japanese economic cycle are determined retrospectively by a Cabinet Office panel of specialists.

In a latest monthly economic report submitted by the Cabinet Office to the economic ministers' meeting, the government downgraded its views on exports and imports, while keeping intact its basic assessment on the country's economy.

It said exports are "in a weak tone" and that imports are almost flat.

The government maintained its overall economic view that the economy is "recovering at a moderate pace," mainly citing increasing capital investment and recovering personal consumption.

This expression was used for the 13th consecutive month.

The first downward revision in exports in three months chiefly reflected weaker demand for information goods such as chipmaking equipment from Asia, "especially China on the back of its moderate economic slowdown," the official said.

The view on imports was revised down for the first time in five months. "Imports of mobile phones from Asia including China were weaker, and those of clothes were not brisk because of warmer weather," the official said.

Last month, the government said exports were "almost flat" and that imports appeared to be "pausing."

The government weakened the wording for its views on consumer and producer prices. Consumer prices are "flat," while producer prices are moderately dropping, the government said after noting slower growth in both prices last month.

The lower producer prices reflected recent drops in crude oil prices, the official of the government agency said.

Labor and services costs are increasing, while durable goods prices such as home appliances and food prices excluding fresh food are weakening, putting a drag on consumer prices, according to the official.

"Companies are apparently unable to fully reflect costs in their product prices because of weak consumer sentiment due partly to natural disasters last year," the official added.

Looking ahead, the government expects the country's economy to "continue recovering," supported by improving employment and wages.

But the official also indicated a need to pay attention to overseas economies, expecting some negative impact of the Chinese slowdown on Japan. Jiji Press