Shares boosted

The markets were more buoyant on Monday in Asia as Japan’s economy was shown to have shrunk less than expected in the April-June quarter. The benchmark Nikkei closed up 1.37 percent after the government announced that the economy had shrunk at an annualized pace of 1.3 percent.

This was far better than the 2.6 percent contraction that had been forecast by some economists for the quarter that followed the devastating earthquake, and a marked improvement on the annualized contraction of 3.5 percent in the January-March quarter that preceded it.

Finance Minister Yoshihiko Noda said Asia's second-biggest economy looked likely to grow again in the July-September quarter, although he warned of the risk posed by the strong yen, which is hurting Japan's exporters.

Recent global market turmoil sparked by the eurozone debt crisis and the uncertain US economic outlook has prompted investors to flock to the yen, which is considered a safe-haven currency.

Bouncing back from disaster

Mitsumaru Kumagai, chief economist at the Daiwa Institute of Research, told AFP that "despite the damage done to supply chains, consumption of durable goods, such as televisions and air-conditioners, did not fall."

"Exports did fall, but not as sharply as expected," he said. "For July-September, it is reasonable to assume a return to growth."

The figures are a sign that Japan's economy has started to bounce back from the natural and nuclear disasters that struck in March. Over 20,000 were killed when an earthquake triggered a tsunami that wiped out entire towns along the Pacific coast and sparked a nuclear emergency at the Fukushima plant.

Commemorating the dead

The news came as Japan observed the 66th anniversary of the end of World War II. Over 7,000 people, including Emperor Akihito, Empress Michiko and Prime Minister Naoto Kan, attended the annual ceremony in central Tokyo. They remembered the 3.1 million soldiers and civilians who died in the war.

Japanese Prime Minister Naoto Kan said he and his cabinet ministers would not visit the controversial Yasukini Shine in central Tokyo, which is a war memorial that enshrined the nation's war dead, including convicted war criminals.

In the past, Japan’s former enemies, especially China and South Korea, have been outraged when Japanese leaders have visited the site on 15 August.

The prime minister was optimistic about the future. "Our nation lifted itself out of the ruins of the war and overcame many difficulties," he said. "With this experience, the devastated areas, and our nation will recover strongly from the disaster."

Author: Anne Thomas (AFP, Reuters, dpa)
Editor: Ziphora Robina