The Limits of Japan's Recovery
Hisane Masaki discusses the relative weakness of the current economic expansion. Although the current recovery is one of Japan's longest, it doesn't match in breadth or scope previous high-growth periods. Growth has averaged only about 2% a year (interestingly, Masaki says many japanese households gauge economic strength by GDP figures; it's unlikely the same is now true for the U.S.)

Moreover, there is the perception, supported by some of the data, that the gap between rich and poor has widened. Rural areas and small towns, not to mention small companies, have done relatively poorly. Land prices in fashionable Tokyo sections like Roppongi are up, but rural land values are down. The Japanese government's fiscal condition remains sour, wages have fallen significantly over the past ten years, and workers are increasingly concerned whether they will receive the pensions they're due.

Notably, with the decline in wages, Japan's vaunted savings rate has dropped sharply. If Japanese decide they need to boost savings rather than buying, it is an all harbinger for a consumer-led expansion in the next phase.