Unexpected strong economic Q1 growth in Japan

Japan’s economy has maintained its growth in Q1 at 2.1% annualised, against market expectations (consensus at -0.4%). This is the second consecutive quarter of positive growth. The breakdown shows that external demanded has contributed mainly to growth (75%), while domestic demand contributed 25% to growth. However, the external demand increase is purely technical and not due to an increase of external demand. Indeed, imports have declined significantly more than exports. Meanwhile, domestic demand has decelerated because of slow private consumption. Public investments have remained dynamic in preparation of the 2020 Olympic Games.