Strong finish to 2007 sets Japan up nicely for 2008

The surge in GDP at the end of 2007 supports our non-consensus view that, rather than heading for recession, Japan will be the only major economy to grow at least as quickly this year as last. It should also dampen speculation that the next move in Japanese interest rates will be a cut, although this speculation appears to be driven by what is happening in the US rather than what is right for Japan.

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