Stefan Worrall Domestic Quotations

We've seen six straight months of industrial production expansion, a very solid turnaround in exports, stronger global growth than a lot of people expected and the domestic economy finally coming back on track in a very solid way.

It's all coming together for Japan right now. Not only is the domestic demand outlook strong, but manufacturing and non-manufacturing firms are expanding, supporting both employment and capital investment.

As we approach 2006 we have domestic demand, which is strong and being built up by employment growth, and businesses becoming more confident, and at the same time you have external demand becoming quite strong.

Before, growth was reliant on the life support of external demand. Japan is moving back to a more normal economy, where domestic demand is the biggest driver.

The main difference this time is the restructuring of the domestic economy, playing down the excessive debts and other hangovers from the asset bubble of the 1980s, and those adjustments have been done. In the past we've had recoveries driven by export growth but no real adjustment in the broader economy in areas outside of exports and manufacturing.