The Japanese economy was already deep in recession when the terrorist events took place. The shock of the terror attacks made things worse, and the economy shrank for 3 months. But the impact was short-lived, and Japan began to recover on the back of renewed US growth. However, the export-led recovery is fragile, and consumers are yet to recover their confidence. The weakness of the dollar is adding to Japan's problems. And the politics of terrorism may have distracted Prime Minister Junichiro Koizumi at a crucial moment from his promise of fundamental economic reform.
BBC Tokyo correspondent Charles Scanlon looks at the continuing problems of the Japanese economy as reform has faltered.
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