Japan’s economy has expanded much faster than forecast, as a surge in exports more than offset weaker-than-expected results for both business investment and private consumption.
Gross domestic product grew at an annualised pace of six in the second quarter, marking the strongest growth since the last quarter of 2020, Cabinet Office data showed.
The figure exceeded economists’ forecast of 2.9 per cent growth. Net exports contributed 1.8 percentage points to the expansion versus consensus estimates of 0.9 points.
Tuesday’s data adds to signs that the world’s third-largest economy continues to recover from the pandemic. The size of the economy grew to 560.7 trillion yen ($3.85 trillion), the biggest on record, surpassing its pre-pandemic peak.
The result was consistent with views at the International Monetary Fund, which recently bumped up its 2023 growth outlook for Japan to 1.4 per cent.
Still, the strong result came with caveats, as much of the growth came from external demand.
“I can’t say all is good when I look at the content. Only net exports beat estimates a lot while consumption weakened and it remains below the level before the pandemic,” said Taro Saito, head of economic research at NLI Research Institute. “I can say that this won’t be a factor to move the BOJ towards policy normalisation.”
Bloomberg Economics' Taro Kimura said. “the only problem – it was all export driven and masked rocky conditions in domestic demand. The drop in consumption, despite a tailwind from this year’s reopening, reflects the impact of wages lagging far behind cost-push inflation.”
Trade data showed that exports remained resilient over the past quarter, led by auto shipments to the US and Europe. It’s unclear if that boost will be sustained, as economists see headwinds on the horizon in the US, China and Europe.
Rising numbers of inbound travellers, whose contribution is also factored into the net exports component of GDP, provided a big economic boost after authorities lifted border controls at the end of April. The number of foreign visitors has recovered to more than 70 per cent of pre-pandemic levels as of June, according to the Japan National Tourism Organisation. Data for July is due Wednesday.
Tourism spending is expected to provide a bigger boost from August after China last week lifted a ban on group travel. Chinese tourists accounted for more than a third of the more than 1 trillion yen in such outlays in 2019.
“Compared with the January-March period, the improvement seen in consumption driven by increased activity has weakened,” said Harumi Taguchi, principal economist at S&P Global Market Intelligence. “Rising prices are increasingly causing consumers to hold off on buying items.”
Capital spending by businesses was flat, versus forecasts of a 0.4 per cent increase, while private consumption, which accounts for more than 50 per cent of total GDP, unexpectedly declined by 0.5 per cent.
Those signs of domestic weakness may quell market speculation that the Bank of Japan will seize the strong headline number as justification for debating whether to mull a move away from its massive stimulus, as Governor Kazuo Ueda has cited uncertainties in overseas markets in recent comments.
In its latest Outlook report, the BOJ noted that external demand may flag in the months ahead, saying, “Exports and production are projected to be affected by the slowdown in the pace of recovery in overseas economies resulting mainly from the impact of global inflationary pressure and policy interest rate hikes by central banks.”
Still, the result may be welcome news to Prime Minister Fumio Kishida as he looks for positive developments to reverse a recent dip in his approval ratings in nationwide polls. His popularity suffered after the roll-out of new ID card for citizens was beset by problems.
The weakening of the yen is weighing on domestic demand as it drives up costs for imported goods. “Import prices are also rising due to the weak yen and other factors, putting downwards pressure on imports,” said Shumpei Goto, researcher at The Japan Research Institute.
That impact may linger as the yen slid on Tuesday to its weakest versus the dollar since November.
Going grey? A stylist's advice
If you’re going to go grey, a great style, well-cared for hair (in a sleek, classy style, like a bob), and a young spirit and attitude go a long way, says Maria Dowling, founder of the Maria Dowling Salon in Dubai.
It’s easier to go grey from a lighter colour, so you may want to do that first. And this is the time to try a shorter style, she advises. Then a stylist can introduce highlights, start lightening up the roots, and let it fade out. Once it’s entirely grey, a purple shampoo will prevent yellowing.
“Get professional help – there’s no other way to go around it,” she says. “And don’t just let it grow out because that looks really bad. Put effort into it: properly condition, straighten, get regular trims, make sure it’s glossy.”
UAE currency: the story behind the money in your pockets
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Sri Lanka squad for tri-nation series
Angelo Mathews (c), Upul Tharanga, Danushka Gunathilaka, Kusal Mendis, Dinesh Chandimal, Kusal Janith Perera, Thisara Perera, Asela Gunaratne, Niroshan Dickwella, Suranga Lakmal, Nuwan Pradeep, Dushmantha Chameera, Shehan Madushanka, Akila Dananjaya, Lakshan Sandakan and Wanidu Hasaranga
Pharaoh's curse
British aristocrat Lord Carnarvon, who funded the expedition to find the Tutankhamun tomb, died in a Cairo hotel four months after the crypt was opened.
He had been in poor health for many years after a car crash, and a mosquito bite made worse by a shaving cut led to blood poisoning and pneumonia.
Reports at the time said Lord Carnarvon suffered from “pain as the inflammation affected the nasal passages and eyes”.
Decades later, scientists contended he had died of aspergillosis after inhaling spores of the fungus aspergillus in the tomb, which can lie dormant for months. The fact several others who entered were also found dead withiin a short time led to the myth of the curse.
Learn more about Qasr Al Hosn
In 2013, The National's History Project went beyond the walls to see what life was like living in Abu Dhabi's fabled fort:
Company profile
Name: Steppi
Founders: Joe Franklin and Milos Savic
Launched: February 2020
Size: 10,000 users by the end of July and a goal of 200,000 users by the end of the year
Employees: Five
Based: Jumeirah Lakes Towers, Dubai
Financing stage: Two seed rounds – the first sourced from angel investors and the founders' personal savings
Second round raised Dh720,000 from silent investors in June this year
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Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
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The figures behind the event
1) More than 300 in-house cleaning crew
2) 165 staff assigned to sanitise public areas throughout the show
3) 1,000 social distancing stickers
4) 809 hand sanitiser dispensers placed throughout the venue
Normcore explained
Something of a fashion anomaly, normcore is essentially a celebration of the unremarkable. The term was first popularised by an article in New York magazine in 2014 and has been dubbed “ugly”, “bland’ and "anti-style" by fashion writers. It’s hallmarks are comfort, a lack of pretentiousness and neutrality – it is a trend for those who would rather not stand out from the crowd. For the most part, the style is unisex, favouring loose silhouettes, thrift-shop threads, baseball caps and boyish trainers. It is important to note that normcore is not synonymous with cheapness or low quality; there are high-fashion brands, including Parisian label Vetements, that specialise in this style. Embraced by fashion-forward street-style stars around the globe, it’s uptake in the UAE has been relatively slow.
GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
Key recommendations
- Fewer criminals put behind bars and more to serve sentences in the community, with short sentences scrapped and many inmates released earlier.
- Greater use of curfews and exclusion zones to deliver tougher supervision than ever on criminals.
- Explore wider powers for judges to punish offenders by blocking them from attending football matches, banning them from driving or travelling abroad through an expansion of ‘ancillary orders’.
- More Intensive Supervision Courts to tackle the root causes of crime such as alcohol and drug abuse – forcing repeat offenders to take part in tough treatment programmes or face prison.
Gothia Cup 2025
4,872 matches
1,942 teams
116 pitches
76 nations
26 UAE teams
15 Lebanese teams
2 Kuwaiti teams
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WHAT IS GRAPHENE?
It was discovered in 2004, when Russian-born Manchester scientists Andrei Geim and Kostya Novoselov were experimenting with sticky tape and graphite, the material used as lead in pencils.
Placing the tape on the graphite and peeling it, they managed to rip off thin flakes of carbon. In the beginning they got flakes consisting of many layers of graphene. But when they repeated the process many times, the flakes got thinner.
By separating the graphite fragments repeatedly, they managed to create flakes that were just one atom thick. Their experiment led to graphene being isolated for the very first time.
In 2010, Geim and Novoselov were awarded the Nobel Prize for Physics.
Killing of Qassem Suleimani
Singham Again
Director: Rohit Shetty
Stars: Ajay Devgn, Kareena Kapoor Khan, Ranveer Singh, Akshay Kumar, Tiger Shroff, Deepika Padukone
Rating: 3/5
MOUNTAINHEAD REVIEW
Starring: Ramy Youssef, Steve Carell, Jason Schwartzman
Director: Jesse Armstrong
Rating: 3.5/5
Gully Boy
Director: Zoya Akhtar
Producer: Excel Entertainment & Tiger Baby
Cast: Ranveer Singh, Alia Bhatt, Kalki Koechlin, Siddhant Chaturvedi
Rating: 4/5 stars
BMW M5 specs
Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor
Power: 727hp
Torque: 1,000Nm
Transmission: 8-speed auto
Fuel consumption: 10.6L/100km
On sale: Now
Price: From Dh650,000
About Housecall
Date started: July 2020
Founders: Omar and Humaid Alzaabi
Based: Abu Dhabi
Sector: HealthTech
# of staff: 10
Funding to date: Self-funded
UAE currency: the story behind the money in your pockets
Auron Mein Kahan Dum Tha
Starring: Ajay Devgn, Tabu, Shantanu Maheshwari, Jimmy Shergill, Saiee Manjrekar
Director: Neeraj Pandey
Rating: 2.5/5
