The main difference this time is the restructuring of the domestic economy, playing down the excessive debts and other hangovers from the asset bubble of the 1980s, and those adjustments have been done. In the past we've had recoveries driven by export growth but no real adjustment in the broader economy in areas outside of exports and manufacturing.

The market has shown itself to be sensitive to changes in sentiment. But nothing has changed with regard to the fundamental outlook for the economy, which is good.

The forces that previously caused deflation in Japan are well and truly over.

Before, growth was reliant on the life support of external demand. Japan is moving back to a more normal economy, where domestic demand is the biggest driver.

It's all coming together for Japan right now. Not only is the domestic demand outlook strong, but manufacturing and non-manufacturing firms are expanding, supporting both employment and capital investment.

It's a clear stamp of confirmation that the economy is growing very strongly.

As we approach 2006 we have domestic demand, which is strong and being built up by employment growth, and businesses becoming more confident, and at the same time you have external demand becoming quite strong.

A sharp rise in yields raises interest rates across all forms of debt. The last thing the Bank of Japan wants to do is to surprise the market.

When companies think interest rates are going to rise they will start investing before that. So that can actually boost capital spending before something such as a tightening in monetary policy.

Today's figures will only heighten the sense that monetary policy is about to change. It may well change next week or in April.