TOKYO: Japan’s economy saw output exceed full capacity by the most in nine years in the April-June quarter, a Bank of Japan estimate showed, a positive sign for the central bank as it seeks to accelerate inflation to its elusive 2 percent target.
The output gap, which measures the difference between an economy’s actual and potential output, stood at plus 1.22 percent in April-June, staying in positive territory for the third straight quarter, the BOJ estimate showed on Wednesday.
The positive output gap exceeded 1 percent for the first time since January-March 2008 — months before the collapse of Lehman Brothers triggered a global financial crisis.
The outcome backs up the BOJ’s view that Japan’s economy is gathering enough momentum for inflation to accelerate toward its 2 percent target, and justifies it from keeping policy steady.
But some studies show there can be a lag between achieving a sustained positive output gap and an actual business response, such as a boost in investment and a pick-up in inflation.
“We’ve seen a dramatic improvement in Japan’s economy,” BOJ Deputy Governor Hiroshi Nakaso told Asahi newspaper in an interview.
“Corporate profits are at record-high levels, the job market is near full employment and wages are rising, albeit moderately. Monetary policy has made huge contributions,” he said.
A positive output gap occurs when actual output is more than full capacity. This happens when factories and workers operate above their most efficient capacity to meet strong demand.
When a positive output gap expands, it is a sign that inflationary pressure is building.
Japan’s economy expanded at an annualized 2.5 percent in the second quarter as consumer and company spending picked up, with steady growth likely to be sustained in coming quarters.
Demand for labor remained at the strongest level since 1974 in August, while business confidence hit a decade-high in the third quarter thanks to robust global growth.
But price and wage growth remain weak with firms still wary of passing more of their profits to employees, forcing the BOJ to push back the timing for reaching its price target six times since deploying a massive stimulus program in 2013.
Core consumer prices rose 0.7 percent in August from a year earlier, well below the BOJ’s target, heightening the chance the central bank will cut its price forecasts again at a rate review on October 30-31.
Japan’s economy sees output exceed capacity the most in 9 years
Japan’s economy sees output exceed capacity the most in 9 years
King Abdulaziz Airport among world’s busiest after record-breaking 2025
RIYADH: King Abdulaziz International Airport has achieved a new historical milestone, reaching 53.4 million passengers in a single year.
This is the highest number ever recorded at a Saudi airport since the beginning of air travel in the Kingdom, placing it among the world’s mega airports in terms of passenger traffic, according to the Saudi Press Agency.
The airport handled a total of 310,000 flights and 60.4 million bags, representing a 12 percent increase compared to 2024. It also handled 9.57 million Zamzam water containers and 2,968 cargo flights.
This achievement reflects the airport’s qualitative transformation and its position as a regional hub and national gateway connecting the Kingdom to the world. It also highlights its role in facilitating the movement of visitors and pilgrims, promoting tourism in line with the goals of Vision 2030, diversifying the economy, and providing a distinguished travel experience.
For his part, CEO of Jeddah Airports Co. Mazen Johar, affirmed that reaching 53.4 million passengers confirms the airport’s high operational readiness and represents a pivotal milestone for moving to the next phase, in preparation for doubling this number, God willing, in the coming years.
He pointed out that this national achievement would not have been possible without the grace of God Almighty, followed by the directives of the wise leadership and the continuous follow-up from the minister of transport and logistics, the president of the General Authority of Civil Aviation, and the CEO of Airports Holding Co.
He explained that King Abdulaziz International Airport is strengthening its position as a major aviation hub in the region through expansions, increased capacity, and improved services, supporting the objectives of the aviation program and aligning with the goals of the Kingdom’s Vision 2030.
The CEO of Jeddah Airports Co. expressed his gratitude to the partners in success from various government and private sectors for their fruitful cooperation through a collaborative work system that contributed to providing the best services.
