The growth of Japan's gross domestic product for three quarters in a row appears to warrant no optimism for the prospects of the economy. The annualized 2.2 percent growth in GDP for the July-September period was driven by a 2 percent rise in exports, while consumer spending and capital investment by businesses, the two major components of GDP, remained nearly flat. Uncertainties continue to hang over external demand, with slowdowns in emerging economies and the unpredictability of U.S. trade and economic policies under the incoming president, Donald Trump.

For a more sustainable path to growth, the Abe administration should urgently tackle long-awaited structural reforms to generate new avenues of economic expansion. It also needs to look more seriously into what is behind consumers' continued hesitation to spend and put priority on adjusting its economic policies to address the problem.

GDP growth in the last quarter accelerated from the 0.7 percent gain in the April-June period and was faster than the average of private-sector forecasts. But personal consumption, which accounts for 60 percent of Japan's GDP, rose a scant 0.1 percent from the previous quarter while the increase in capital investment stood at a mere 0.03 percent. While exports, which statistically include spending by inbound tourists, were pushed up by brisk sales of semiconductor production equipment to Asia and electronic parts for use in smartphones, domestic demand gained only 0.1 percent, with a 0.6 percent fall in imports reflective of the sluggish demand at home.