Moderate economic rebound for Japan

Japan's Cabinet Office announced yesterday that the economy is bouncing back at a moderate rate. This is despite the fact that its consumer confidence index for June fell 1.7 point from the previous month to 46.6.

Exports may not help the Japanese economy much either. Japan's Finance Ministry reported today that exports in May were up by only 1.7 percent from a year earlier. Imports surged 21.2 percent due to higher oil prices. As a result, Japan's current account surplus fell 19.5 percent.

And the Ministry of Economy, Trade and Industry today reported a revision in Japan's industrial production for May to a fall of 2.8 percent compared to the previous month from a preliminary 2.3 percent decline.

The moderate rate of economic recovery in Japan was undoubtedly taken into consideration by the Bank of Japan when it announced that it was keeping monetary policy unchanged today. In addition, the Bank of Japan had reported yesterday that the corporate goods price index (CGPI) rose 1.4 percent in June from the same month a year earlier but fell 0.1 percent from May, indicating that the threat of deflation lingers.

And there are signs that inflation remains relatively tame worldwide. Consumer price indices in June rose 1.7 percent from a year ago in Norway, 0.6 percent in Sweden and 2.0 percent in Britain.