Japan economy: Budding on domestic demand, Nikkei hits 5-month high

Japan economy: Budding on domestic demand, Nikkei hits 5-month high

Japan is a country that carries a symbol of a phoenix and so does the Japanese economy. Japan has stunned the world with economic achievements despite being beaten to the ground in the 1945 war. According to the latest updates, Japan's economy has expanded faster-than-expected in last three months and there is a significant increase in the GDP growth.

Japanese economy is booming once again on rising domestic demand for green cars and cigarettes. The consumer spending for these products has increased as the consumers want to avoid a tax rise that may occur after the end of government subsidies.

However, Japanese exports are lagging behind the growth and prospects are quite weak in the current quarter. The key reason behind this decline is the continuous growth of the yen. The high value of the yen is affecting the exports making the products more pricy for the overseas consumers. Another effect is that the yen's growth is hampering the earnings of Japanese exporters, especially when they opt for price-cuts to compensate the costly deals.

Junko Nishioka, chief economist at Japan's RBS Securities said, "Third-quarter growth relied heavily on domestic demand, and this suggests a marked slowdown in the final quarter as stimulus-driven consumption loses steam and export growth slows."

Nikkei shines all over again

Japan's Nikkei index rose by 1% to its highest in about five months on the second day of the week. Increase in demand for domestic goods and exporter shares have fetched profits.

The benchmark Nikkei was up 0.7% at 9,899.72 on Tuesday. The broader Topix index added 0.5% to 856.07.

The next target is expected to be around 10,251.90 points.

Are the big daddies noticing these details?

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