"With regard to the outlook, Japan's economy is expected to recover moderately on the back of the resilience in domestic demand and the pick-up in overseas economies"
- The Bank of Japan
Economic activity in the world's third largest economy is starting to flourish under Shinzo Abe's stimulus policies, as purchasing by the nation's companies picked up in May, a release by the Ministry of Economy, Trade and Industry showed Friday. The Indices of All Industry Activity, which is considered as a measures of value of goods and services purchased by domestic companies, soared 1.1% in May, against an expected gain of 1.3%, however, better than the previous month's figure of a 0.1% increase. It is the fourth straight month of gains in the index, pointing at stable growth in businesses' mood. Performance in all- construction, industrial, agriculture and tertiary industries improved, pushing the index higher, with activity in tertiary sector making the biggest contribution.
A separate report on Friday showed that a gauge of purchases of services only, which accounts around 60% of total economic output, surged 1.2%, swinging around from a drop of 0.5% in the prior month. Manufacturing industry, which account for more than 20% of GDP, has also seen a turnaround since Abe's appointment. The latest data speaks volumes for Abe, who pledged to put Japan back on the map as one of the economic powerhouses, as it has struggled from a slowdown and deflation for several decades.
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