The nation's gross domestic product in the July-September period grew an annualized 2.6 percent from the previous quarter — more than economists expected. This was a rebound from the 1.6 percent contraction in the previous quarter.
About 1,200 major companies listed on the first section of the Tokyo Stock Exchange saw figures for sales and recurring profits in the April-September period grow an average 8.6 percent from the preceding six months. Net profits increased 19.2 percent. Depreciation of the yen against the U.S. dollar and the euro and strong overseas economies helped Japan's exports grow 2.9 percent in the third quarter.
But optimism cannot be warranted for the Japanese economy. Although the effect of the subprime mortgage fiasco in the United States was not apparent in the July-September period, confusion in the financial market caused by the problem is likely to cast a cloud over economic activities. The gradual appreciation of the yen and a downtrend in U.S. consumer spending could depress profits of Japanese companies that rely on exports.