The Japanese economy grew 0.7 percent in the second quarter of this year, with the ongoing island disputes and other diplomatic crises dealing a hefty blow, says an article in People's Daily. Excerpts:

Both the Japanese cabinet and its central bank concluded that the country's economy is moving from "recovery" to "stagnant".

Its major enterprises within the automobile and electronics sectors have suffered worst.

The central bank recently decided to continue its zero percent interest rate policy and increase the scale of its quantitative easing to 91 trillion yen ($1.14 trillion).

It is rare for the Japanese central bank to increase the scale twice in less than as many months. Still, the moves are unlikely to prevent a worsening in the Japanese economy.

The country's authorities are increasing investment in public infrastructure and carrying out quantitative easing in a bid to stimulate domestic demands.

But the main cause of Japan's ongoing economic stagnation is weakening foreign demand.

Increasing the country's exports is the only way for Japan to recover.