Output and retail sales are up in Japan—and Prime Minister Shinzo Abe’s approval rating with them. Reuters:
Trade ministry data on Monday showed factory output rose 1.4 percent month-on-month in October, versus economists’ estimate for a 1.9 percent gain and 1.1 percent increase in September, led by general-purpose machinery, cars and electronics.Separate data showed retail sales rose 1.8 percent in the year to October, more than a 0.8 percent annual gain expected, on sales of clothes, food and drink, cars and home appliances.Monday’s data underlines analysts’ expectations that the economy is headed for a modest rebound over the current October-December quarter, after it suffered a second straight quarter of contraction through September – a technical recession.
This doesn’t mean that Japan’s economy is out of all trouble, of course, just as the recent recession didn’t mean that the country’s economy was doomed. We shouldn’t judge the success of Abe’s economic program on the basis of month-to-month market fluctuations, which have a lot to do with what’s happening in China and are not a sure indication of whether Abenomics is working. The one thing we do know independent of the fluctuations: The long-term prospects of Japan’s economy are pretty good.This story is more important, then, for the light it shines on Abe’s political future than for anything definitive it alone tells us about Japan’s economy. Abe’s push for remilitarization sent his poll numbers down a couple of months ago. Now those numbers have rebounded eight points since October, as Abe has refocused on his signature—and popular—Abenomics growth program.Opposition to remilitarization, it appears, has not been durable or strong enough to sink Abe. For all the noise made about remilitarization at the time, Japan seems to have moved on.