Japan registered an economic expansion for eight quarters on the trot courtesy of strong consumer spending in the October-December 2017 period. Further, unemployment in the economy is near a four-decade low. Also, influx of money into the economy in the form of business and capital spending coupled with business-friendly economic and monetary policies has been pivotal in boosting Japan’s economic growth.

Under such favorable economic conditions, investing mutual funds that invest in Japan would make for a prudent decision.

Japanese Economy Grows For the Eight Straight Quarter

Japan’s GDP growth slowed in Q4, in line with the initial estimate. However, it grew for eight consecutive quarters, the longest streak of growth since a 12-quarter expansion ended in 1989 — the period of Japan’s economic bubble.

Japan’s economy grew at an annualized 0.5% in Q4 compared with 2.2% in the prior quarter. The rate of growth was below a median estimate of 0.9%, per Cabinet Office data. Bank of Japan’s easy money policies and Prime Minister Shinzo Abe’s stimulus measures are driving economic growth.

Factors Contributing to Such Growth

Accounting for two-thirds of GDP, private consumption grew 0.5% compared with a contraction of 0.6% in the previous quarter and surpassed expectations of a 0.4% increase. Moreover, capital expenditure rose 0.7% sequentially in the quarter compared with analyst expectations of a 1.1% increase. Capital expenditure grew for the fifth straight quarter, driving optimism on higher business investment. Finally, jobless rate in Japan fell to a 24-year low to 2.7% in November on the back on the highest number of job openings in as many as 40 years.

Moreover, exports advanced 9.3% in December after registering an increase of 16.2% in November, per the country’s Ministry of Finance. Exports rose for 13 straight months for the first time. Additionally, its manufacturers’ confidence climbed from 27 in December to 35 in January, reaching its best level in 11 years, per a Reuters Tankan poll. Strong rise in exports and robust manufacturer sentiment raised optimism for steady economic growth in the near future.