8 take over from public spending fell by 4

Disappointing for some, beginning of a reversal of trend for the most pessimistic, growth in the second quarter to the Japan figures, published Friday, were surprised by their mediocrity. Japanese GDP increased by 0.2 between April and June from the previous three months. A result very less than 0.7 recorded between January and March. On an annual basis, the increase does not exceed 0.8.

Slowdown does not mean recession. The provisional results published at the weekend should not make us forget that the world's second economy still growing, and this for the sixth consecutive quarter. Unless an accident, it is expected to grow by 2.1 in rate during the 2006-2007 fiscal year, according to the Japanese authorities, after 3.2 in 2005-2006 and 1.7 the previous year.

The statistics published Friday did, it seems, pas influenced the Bank of the Japan, which, in line with expectations, did not change its interest rate meeting monthly ("Les Echos" on August 11, 2006). "Do not allow themselves to be impressed by the overall figure for growth, but should look, on the contrary, the details of what the compound", argues Takuji Aida, Chief Economist of Barclays Capital.

If the time is not an unbridled growth, but rather a wise and strong GDP increase, it is increasingly fuelled by domestic demand. It is the good news of the quarter, where private investment ( 3.8) take over from public spending fell by 4.6, result of the necessary cuts. "The settlement of public demand" is one of the main reasons for the disappointing figure 0.2 recorded for the quarter, said Paul Sheard, Chief Economist for Lehman Brothers.

Morale of the households on the rise

Fortunately, the household consumption is, as the investment of private companies, day ( 0.5 from April to June compared with 0.2 in the first quarter). Despite a rainy and cold spring which has not hardly encouraged purchases of clothing, Japanese consumers are largely deferred on household appliances and electronic products.

In this context, the lack of dynamism of exports ( 0.9, well below the 2.2 in the first quarter) appears to be less concern for the GDP. On the other hand, while imports continue to be higher ( 24.7 in the first half), increased course by the oil bill, the archipelago sees melt its surplus ( 23.3 on a year) to 4.004 billion yen in the first half. Its lowest level since... 1985.

Generally, time is not the concern. The morale of households continued to recover in July under the influence of employment opportunities. The index measuring the opinions of the household of two people or more increased to 48.6 against 47.2 the previous month, according to the data transmitted by the entourage of Prime Minister. Below 50, it shows that the number of pessimists is greater than optimists.

One of the reasons for the improvement is the unemployment rate to its lowest level for eight years. New investments in the archipelago, as the Honda here weeks or recently that Suzuki ("Les Echos"from Thursday, August 10""), also contribute to support the morale of the Japanese.