China Jumps over Japan in World Economy

The latest figures have put China ahead of Japan as the world’s second-largest economy for the quarter on a nominal dollar basis.Japan’s second quarter GDP before seasonal adjustments totaled $1.2883 trillion against China’s second-quarter unadjusted GDP of $1.3369 trillion.

However Japanese officials said that one should wait for full-year figures before changing the rankings. Besides, since Japan and China have different calculations for seasonal adjustments, the experts claims that it would be correct and fair to compare the figures for the whole year. China’s top currency regulator on the other hand said last month that his country’s economy had already overtaken Japan’s.

Japanese government bond futures jumped after the weak data, with September 10-year futures rising 0.28 point to 142.67, their highest since June 2003, while benchmark 10-year yields slipped to a seven-year low of 0.950 percent. The Nikkei stock index fell nearly 1 percent.

“The economy may enter a lull late this year or early next year, or even stagnate,” said Yoshiki Shinke, senior economist, Dai-Ichi Life Research Institute.

However much depends on the performance of overseas economies.