Slow or near-zero growth in domestic demand has made the inflexibility of the German labour market ever more costly for businesses.

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Japan's biggest bank by assets and market value is keen to expand outside its domestic market, where loan demand is sluggish following two decades of economic stagnation.

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The optimism is based not on an expectation of rapid or large increases in domestic sales, but rather on confidence in the continued strength of overseas market demand for Japanese products.

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Given the importance of property to domestic demand, the government is highly unlikely to want to clamp down hard on the housing market.

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But Annalisa Piazza, market economist at Newedge, warned that demand was "probably led by domestic accounts who took advantage of higher yields".

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