The huge amount of spare capacity left by the recession, and other headwinds, means that any pick-up in investment spending in Japan is unlikely to be spectacular. But this does not mean that investment will fail to recover at all. We expect both business investment and housebuilding to make significant positive contributions to GDP growth in the first half of this year. Indeed, the monthly data suggest that they may already have begun to do so in the final quarter of 2009.
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