Just days after Japan revealed its economic expansion in October was less than 50 percent of September’s rate, the country reported its exports rose at the fastest pace in three years. This very clear sign that international demand is picking up steam again couldn’t come at a better time for an economy in the earliest stages of recovering from a decades-long recession. Even though Prime Minister Shinzo Abe’s economic reforms have resulted in a 14 percent drop in the value of the yen against the dollar, there’s still worry among analysts that international demand alone won’t compensate for more slippage in the country’s domestic demand. However, there is a short-term fix on the horizon, as Japan is scheduled to see a sales tax increase from 5 percent to 8 percent in April 2014. Analysts expect a rush of consumers to spend disposable income before the tax hike takes effect in 2014. After April though, it’s anybody’s guess as to which way Japanese markets will run.
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