Aso told journalists that the core machinery orders have grown by a whopping 14.2% during March. He also reassured the people that with the economy performing better, capital spending will increase too.
This is the highest jump Japan has seen since April 2005.
In any economy, core orders are considered to be an indicator of corporate capital spending. According to economists, any changes in the number of core orders are indicative of the performance of the overall economy.
These figures bring relief to the current Japanese government as they prove that government's aggressive-spending approach is finally reaping benefits, and that the vast stimulus released by the government played a pivotal role in pulling out an economy that has been under an economic crisis for years now.
More recently, the Cabinet Office had also declared that the Japanese economy had grown by 0.9% during the first quarter. Going by this figure, Japan's annualized growth rate comes to 3.5%.
Though the government claims that the machinery orders are showing signs of gradual improvement, the figures reveal that these orders are likely to register a downfall of 1.5% during the period from last month to next month.
According to people keeping an eye on Japanese economy, Prime Minister Shinzo Abes 'Abenomics' is finally beginning to show results, and the booming stock market and a declining Yen are indicative of this very fact.
In comparison to last year, the Japanese stock market has grown by almost 70%. During this time, the Yen declined by almost 25%.
Though it looks like Japan is on the right track, it is too soon to make any such claims.
According to Jonathan Price, Director of Mergers & Acquisitions at Tokyo Headquartered Nikko Holdings, "Japan's economy will make a significant recovery only when the country registers an economic growth of 2% to 3%. Once this is achieved, domestic demand will finally go up and the country will eventually overcome deflation."
Market analysts believe that the Japanese government will have to refine and push its policies if it wants to see Abenomics delivering more significant results in the future.
Trade and Industry Minister of Japan, Toshimitsu Motegi, addressed journalists yesterday. The minister said that the government resolves to take more steps to encourage corporate capital investment as this would contribute to overall economic growth.
Under the Abenomics, the government plans to increase the sales of Japanese infrastructure technology by three times. The government plans to raise the sales to $290 billion by 2020. To achieve this, the Prime Minister of Japan also has taken up the role of salesman-in-chief for Japan.
Source: Jonathan Price, Director of Mergers & Acquisitions with Tokyo Headquartered Nikko Holdings
Contact: https://nikkoholdings.com
