It looks like the Japanese economy is finally picking up again.

The government on Friday upgraded its assessment of the economy in September for the second month in a row, citing increased capital spending and a pickup in exports.
"The economy is showing movements toward incipient recovery," the Cabinet Office said in its monthly economy report, employing a more upbeat tone than in its August report, when it said the economy "remains roughly flat."

Economic and fiscal policy minister Heizo Takenaka said the economy, which has long remained flat, was finally entering a new phase.

...[t]he Cabinet Office attributed the September uptick to stronger capital spending, helped by an increase in exports, including exports to other Asian countries that had declined due to the outbreak of severe acute respiratory syndrome...

According to the report, exports are "showing incipient recovery," an upgrade from the previous report, when the office said they were "weakening."

Corporate profits are continuing to improve, an upgrade from the previous report, which says they were gradually improving.

While the employment situation continues to be severe, evidence of an incipient recovery can be seen, the report says. In the August report, the office said there were signs of an incipient recovery only in some areas.

This is excellent news... a recovery in Japan will do a lot for the world economy and the East Asian regional economy, and may help the U.S. economy as well. The report also said that the U.S. economy is recovering, although there remains the question of whether it will either head back downward or, perhaps, remain the sort of "jobless recovery" that bedeviled Bush's father. Perhaps it won't, which would be a big boost for Bush.

It depends, I suppose, on whether the deficit really does have a drag effect on the U.S. economy.