Japan pick-up spreads to the wider economy

Japan's export-led recovery is spreading to non-manufacturers and consumers, the Bank of Japan said yesterday, as it refrained from pumping extra cash into the economy.

Japan's export-led recovery is spreading to non-manufacturers and consumers, the Bank of Japan said yesterday, as it refrained from pumping extra cash into the economy.

In its monthly economic report, it raised its forecasts for growth in the world's second-biggest economy for the first time since December. "Corporate profits continue to increase, and improvements in business sentiment have been spreading across industries," the central bank said. "Japan's economy continues to recover gradually, and domestic demand is becoming firmer."

The latest assessment compares with the March report, which simply said that "Japan's economy is recovering gradually" without referring to the development in domestic demand.

Share prices in Tokyo have surged to 32-month highs on the back of a spate of reports indicating that the world's second-largest economy is finally emerging from its decade-long stagnation.

Japan's economy grew at an annual 6.4 per cent pace in the fourth quarter, the fastest in 13 years. Confidence among non-manufacturers rose to an 11-year high, while optimism for manufacturers rose to the highest since 1997.