Is the economy of Japan recovering?

Earlier today, Reuters reports that Governor Shirakawa sees signs of "sustainable recovery. As you all know, Japan has been suffering a serious deflation these past several months. Also, I mentioned a few weeks back that Japan was looking to push monetary policy by creating more money for people to spend. Shirakawa thinks that pushing monetary policy is a bad thing right now because he sees the economy slowly getting better. The people of Japan were afraid of a "double-dip" economy deflation, meaning that the deflation was going to happen again. However, Shirakawa says that capital spending is increasing and corporate profits are increasing, so there is no need to pump money in the economy and suffer through inflation. Japan has pulled out of a recession last year just barely. Right now, Japan has a growing fiscal deficit, meaning that they are losing money to spend all the time. It has been said that Japan's debts are right now twice the size of the economy.

In my opinion, I agree with Governor Shirakawa. When I took economics my senior year of high school, one of the many things I learned about economics is that the whole economy goes through peaks and troughs. There is a cycle that will kill itself and then repair itself. Things have to change in order to grow. The economy will slowly get better naturally than if we pump more money into the economy. Then again, I'm only a student, but it seems more logical to just let it be if it's going to come back naturally.

Sources

Kihara, L (2010). BOJ chief sees signs of sustainable economic recovery. Reuters. Accessed on April 7, 2010 from http://www.reuters.com/article/idUSTOE63604Y20100407