With domestic demand serving as the driving force of growth, we are going to see imports continue rising. Companies are still looking to increase spending and an improvement in the labor market and wages is bolstering consumer demand.
Companies and consumers are going to keep driving economic growth this year. There is no doubt this recovery, which being is driven by domestic demand, is sustainable.
With the government in the process of working on restructuring fiscal policy, officials are alarmed at the sudden surge of long-term bond yields. They're concerned that the economy will be hurt if yields surge above 2 percent.
While the government accepted the decision to shift policy, that was because it was a symbolic move and had no real implications for long-term yields. There's no doubt they'll put more pressure on the Bank of Japan to keep the zero rate policy.
