Japan’s Economic Recovery in Q4
After a year fraught with closures and restrictions due to the COVID-19 pandemic, Japan recently reported some good news as the nation’s economy began growing in Q4 of 2020, with companies and businesses finally making gains once again. In fact, Japan’s economy grew by an annualized 12.7% in Q4 as international and domestic business spiked as nationwide pandemic restrictions continued to ease.
The growth in Q4 beat out median economist expectations of 9.5% as manufacturing companies have boosted production scale once again, offsetting slower gains in other economic areas of business. On top of this, Japan also beat out expectations in private consumption as well, growing 2.2% while economists predicted just 1.8%. One of the most impressive feats of the news came from the 4.5% rise in capital expenditures, marking the first increase in the area in 3 quarters now.
The economic recovery fueled by international business alongside growth from local companies as consumption ticked higher once again has put Japan on an incredibly positive path towards pre-pandemic levels of recovery by the end of 2021.
When writing about this recovery, economist Marcel Thieliant said, “And while most economists expect a renewed contraction this quarter due to the second state of emergency, we think that output will be broadly flat in Q1 and rise more strongly this year than almost anyone anticipates.”
Nikkei 225 Breaks 30,000
As companies and businesses of all types across Japan have seen growth in Q4, the Nikkei 225 reflected the optimism moving forward as the stock market index broke 30,000 for the first time since August of 1990. On Monday in the country, the stock market index rose by 1.91% to 30,084.15, making it the largest gainer in the Asia-Pacific region that day.
Business growth is once again expected to slow in Q1 of 2021 for Japan as newly reinstated pandemic restrictions have hurt companies across the nations, however, as vaccine rollout continues to ramp up, this is not expected to last. Travel, restaurants, and other areas of vulnerable business will suffer slightly, but capital expenditures and government based spending and relief will more than make up for the dip as companies continue to trend upward early in 2021. The Nikkei 225 breaking 30,000 marks a significant stride for companies all over Japan as renewed optimism in both domestic and international business has increased investor excitement as the world tries to move forward from the COVID-19 pandemic.
About the Author
Tom Price is a writer focusing on entertainment and sports features. He has a degree from NYU in English with a minor in Creative Writing. He has been previously published for Washington Square News, Dignitas, CBR, and Numbers on the Boards.