Blessing

Japan has spent so many years being described as a stagnant economy that even modest growth now feels like a surprise. For decades the country was treated as the textbook example of what happens when demographics deteriorate, consumers stop spending, and deflation becomes embedded in national psychology. Economists built entire careers around explaining why Japan could no longer grow the way it once did.

And then the first-quarter GDP numbers arrived.

On paper, the figures may not look explosive by the standards of fast-growing emerging markets. But for Japan, they were remarkable. Annualized GDP growth accelerated to 2.1 percent, significantly above expectations and far stronger than the previous quarter’s revised 0.8 percent. Quarterly growth came in at 0.5 percent, also beating forecasts. Those are not numbers associated with an economy supposedly trapped in permanent paralysis.

What makes these results important is not just the headline growth itself. It is the composition of that growth. Japan is not being carried by a single temporary factor. Consumption improved. Investment remained positive. Exports strengthened. Inflation stayed elevated. In other words, several engines of the economy started moving at the same time.

That combination matters because Japan has spent years trying to escape a vicious cycle in which weak demand led to falling prices, falling prices encouraged consumers to delay purchases, and delayed spending weakened growth even further. Breaking that cycle was the central mission of the Bank of Japan for more than a decade.

Now, for the first time in years, there are signs that the psychology of the country may actually be changing.

The biggest development inside the GDP report was private consumption. It rose by 0.3 percent after stagnating in the previous quarter. In many economies, that would barely attract attention. In Japan,...