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Japan's Economy Is Still Outrunning Its Potential Growth Rate

  • It’s shaken off effects of poor weather and corporate scandals
  • Capital investment that’s exceeded estimates is a key factor
The Rainbow Bridge stands illuminated at dusk in Tokyo, Japan, on Monday, Nov. 6, 2017. The Japanese Cabinet Office is scheduled to release third-quarter gross domestic product (GDP) data on Nov. 15, 2017.
The Rainbow Bridge stands illuminated at dusk in Tokyo, Japan, on Monday, Nov. 6, 2017. The Japanese Cabinet Office is scheduled to release third-quarter gross domestic product (GDP) data on Nov. 15, 2017.Photographer: Tomohiro Ohsumi/Bloomberg

Japan’s economy is on track to close out the year expanding faster than the rate which typically sparks inflation, even after recent soft readings for consumption and prices.

Global demand remains strong, driving double-digit gains in Japanese exports in recent months and helping to fuel business investment. Capital expenditure stood out in a slew of important data released on Friday, beating expectations with a 4.2 percent gain in the third quarter.