Japan's gross domestic product increased 0.9 percent in real terms in the July-September quarter from the April-June quarter for an annualized 3.9 percent growth rate. The 0.9 percent increase contrasts with the 0.4 percent rise registered in the previous quarter.
Domestic demand pushed up GDP by 0.9 percent. Net exports (exports minus imports) pushed it up by only 0.02 percent. It appears as if economic growth was driven by strong domestic demand, but this is deceptive.
Consumer spending, which makes up about 60 percent of Japan's GDP, rose 1.1 percent from the April-June quarter, in a sharp contrast to the 0.1 percent rise in the previous quarter. But the rise in consumer spending was largely due to last-minute buying of eco-friendly cars and cigarettes ahead of the expiration of government subsidies for such cars and the increase in tobacco prices. Sales of air conditioners and beverages also increased due to the heat wave last summer.