Almost there...

Japan's revised stronger than expected fourth quarter GDP rate confirms yet again that the economy is pulling itself out of the doldrums. The continued strength in exports has prompted firms to upgrade existing plants and build new ones. An increasing share of demand is coming from its neighbors, particularly China with its insatiable appetite for not only construction equipment but also high tech instruments as a distinct middle class starts to form. As mentioned before, the emergence of China and India as new economic powers should help reduce volatility related to the historical dependence on it's largest export client, the U.S. With record low unemployment and improved consumer and business confidence, the disinflationary cycle seems to be in its last throes, although its unlikely that we will be seeing a sudden jump in prices especially considering the recent drop in oil prices which can only add downward pressure on prices in a country that imports almost all of its energy needs.