Cheerless boom: Japan logs second-longest postwar recovery

A formal determination of the length of the streak -- which began in December 2012, when Shinzo Abe made his comeback as prime minister -- will be made by the Cabinet Office after consulting with a panel of experts at a later date. But September's reading of the coincident index of business conditions, one of the gauges the government uses to measure boom-and-bust cycles, pointed to continued expansion.

Japan's moderate yet sustained recovery rests on a healthy global economy. All 45 countries tracked by the Organization for Economic Cooperation and Development are set for economic growth this year. The last simultaneous expansion was between 2004 and 2007, before the global financial crisis.

With growth comes external demand, which has benefited Japanese business. The recovery also owes much to Bank of Japan's unprecedented monetary stimulus, which has helped weaken the yen and prop up corporate earnings.

Low expectations

But lackluster gains in household income are cause for concern. Total cash earnings per employee have climbed just 1.6% since November 2012. This gives evidence to those who feel that the economic recovery is only barely palpable.

Consumer spending has been weak, especially when it slumped following the consumption tax hike in 2014. Adjusted for inflation, consumption has gone up only 3% during this recovery. The 57-month "Izanagi boom" of 1965 to 1970 saw a 50% jump, while the 73-month "Izanami boom" that started in 2002 pumped up spending by 7%. The names derive from the two main deities in the Japanese creation myth.

That the current recovery has not made most Japanese feel richer also owes to change in how the country generates wealth. Exports, the traditional economic driver, have increased 26% -- far less than the 83% gain during the pre-crisis boom. The slack has been taken up by overseas investment, whose returns do not always flow back to Japan.