Japan's Affluent Economy

Japan's Rapid Growth Spurt The country's gross domestic product is rising at a blistering pace. Could it outperform the U.S. this year? Speculated by Bussiness Week

Check out Tokyo's bustling electronics shops for signs that Japan is definitely back. At Bic Camera's five-story complex in downtown Tokyo on a weekday afternoon, dozens of people were eye-balling giant flat-screen TVs. Though they sell for anywhere between $1,000 and $6,000, demand for the gadgets is white hot. "Big-screen TVs are popular because of the Olympic games in Italy and this year's World Cup soccer finals," says Yumi Kawahara, a spokeswoman for the electronics chain.

Yet there is far more driving the economy than die-hard Japanese sports enthusiasts. On Feb. 17, the Japanese government revealed that gross domestic product expanded at a blistering 5.5% pace in the October-December quarter -- which blows away the 1.1% annualized growth the U.S. managed last quarter. "This is not a one-quarter wonder," says Jesper Koll, chief economist at Merrill Lynch in Tokyo. "Japan's GDP has risen more than 5% for three of the last four quarters."

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