"Over the medium term, Japan will need to achieve higher growth, which is essential to ensure fiscal sustainability and lower public debt"
- Anoop Singh, IMF Asia-Pacific Department Director
As it was promised, the world's third largest economy is starting to flourish amid government's growth policies, also known as Abenomics, aimed at boosting private consumption and investment that are finally starting to pay off. A bunch of reports from Statistics Bureau and the Ministry of Economy, Trade and Industry showed that unemployment rate fell in line with forecasts, while retail sales and household spending surprised markets to the upside. The nation's jobless rate fell to 4.0% in September, down from 4.1% a month earlier, while the availability of jobs stood at the highest level in more than five months. Furthermore, the total number of job offers soared 2.7% on a monthly basis and 9.2% from the same period a year ago. Another gleam of hope came from retail sector, where sales surged 3.1%, following a 1.1% in August and beating analysts' expectations for a 1.8% growth. In addition to that, household spending, which accounts a majority of overall activity in the country, rocketed 3.7% annually, recovering from a 1.6% decline in August.
Amid concerns the Federal Reserve will start tapering its QE soon, there was a huge capital outflow from Asia; however, and increase in Japanese foreign direct investment and bank's lending to Asia helped to offset this negative factor. It is already considered by analysts that a first phase of Abenomics has gone very well, even though expectations remain very high.
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