The first quarter of 2002 saw Japan's economy growing by 1.4%. Spread throughout the year this translates to 5.7%, a better performance than the US.

The highest growth figures for two years, one needs to be cautious however. While there is some evidence of domestic demand increasing, this has been as export-led recovery, headed by a lower yen making cars and electronics more competitive on world markets. The government itself expects growth to be static for the rest of the year, and much depends on US recovery.

Consumers are awakening again, but are now far more price conscious. Discount alternatives from fast food to discount department and fashion stores seem to be what is drawing out the Japanese consumer.

Key however, is that Japan is showing some signs of life, but it will be a slow recovery. Look to 2003 for any real substantive return to consumer spending.