start the economy. Rejection of the postal reform bill Monday was "a major political blow" to Koizumi, conceded Takahira Ogawa, Director of Sovereign and International Finance Ratings at Standard & Poor's. But economic reforms are likely to continue regardless of who wins the Sept. 11 vote, he said. "Overall, Japan's economy is in much better shape to weather a political storm than a few years ago," Ogawa said. "We expect that whoever takes government, the broader policy on structural reform will be maintained." Standard & Poor's affirmed its "AA-" long-term and "A-1+" short-term sovereign ratings for Japan and kept its outlook "stable." The Bank of Japan, meanwhile, said in its monthly report that exports are increasingly moderately, an improvement over last month's assessment that "growth in exports remains weak." Industrial production is in also an "uptrend," although there are some bumps in the information technology sector, the report said. "Household income has been rising moderately, as the employment situation has been improving and wages have picked up," the Bank of Japan said. In July, the bank simply said wages had stopped declining. Japan's jobless rate fell to 4.2 percent in June, its lowest level in seven years. The Cabinet echoed the Bank of Japan in saying exports are improving along with household spending. "The economy is recovering at a moderate pace," it said in its monthly report on the economy. "It can be judged that the economy is out of its lull." Japan's main stock index, the Nikkei 225, gained 1 percent Tuesday despite upheaval about the elections. Koizumi called the poll a referendum on whether people wanted to privatize the postal system. Japan has struggled to wrest itself out of inconsistent growth since the early 1990s, and the economy has been on a moderate rebound in the last few years.
