DEBORAH MARCHINI, CNN ANCHOR: Japan's economy grew for the second consecutive quarter. Hugh Carnegy of the "Financial Times" joins me from the "FT"'s London newsroom to tell me if Japan's finally out of the doghouse. What do you think, Hugh?</s>HUGH CARNEGY, WORLD NEWS EDITOR, "FINANCIAL TIMES": Well, it's certainly an encouraging sign. Growth at an annualized rate was 4.3 percent in the second quarter and that was fueled partly by an increase in consumer spending. And that's been seen as very encouraging. We know the Japanese government has been spending a heap of money to try and jolt the economy into action, but the sign that private consumers are beginning to spend money is encouraging. It's cautious, but it's definitely better news.</s>MARCHINI: Hugh, we know a lot of European money has been coming to the United States seeking investment, yet Japan reported net capital inflows for the month of August. Do we think the Europeans may start diverting their investments to Japan?</s>CARNEGY: I think that the mood is still cautious about Japan, but in the past we've seen -- last year, for example -- a sort of mini boom in Japan in the stock market as people began to anticipate a recovery. And they were a little ahead of the game and it didn't happen and there was a bit of a slide back. So I think people will be a little bit cautious. But, as I say, the signs are looking good, but there are still a lot of worries there. Don't forget that Moody's downgraded Japan's sovereign debt last Friday. The Japanese have a huge volume of public debt and there are some worries about the structural effects of that. So I think people are still looking at Japan with a little bit of caution.</s>MARCHINI: Hugh Carnegy of the "FT," thank you.
'Financial Times': Japan's GDP Grows 1 Percent April-June; Crucial Personal Spending Also Rises