Japanese economy grows as 'Abenomics' pays off
JAPAN'S economy grew more than the government initially estimated in the first quarter, helping Prime Minister Shinzo Abe to sustain confidence in his campaign against deflation.
Gross domestic product (GDP) expanded at an annualised 4.1pc, compared with a preliminary calculation of 3.5pc.
Nominal GDP rose 0.6pc from the previous three months, leaving the economy 7pc smaller than in the same period in 1997.
Consumer confidence in May was at its highest level since 2007.
Stocks surged, aiding Mr Abe's efforts to maintain momentum as the government moves on to the "third arrow" of Abenomics, the growth strategy to accompany monetary and fiscal stimulus.
BANK OF JAPAN
While Bank of Japan (BOJ) policy makers met yesterday and are due to met again today, their policy moves may be constrained by Governor Haruhiko Kuroda's pledge to avoid "incremental" steps after unveiling unprecedented easing in April.
"This is what Mr Abe needs for major structural changes this year," said Martin Schulz, an economist at Fujitsu Research Institute, based in Tokyo.
"With a consumption-tax rise looming next year, the economy is in a 'sweet spot' that gives the administration the window to pursue its growth agenda after July elections."
The current-account surplus for April was 750bn yen (€5.7bn), the finance ministry said.
Capital investment fell 0.3pc in the first quarter from the previous three months, compared with the government's initial estimate of a 0.7pc decline.
Domestic demand rose 0.6pc, up from an earlier calculation of 0.5pc.
Yesterday's data came as Mr Kuroda chairs his fourth monetary-policy meeting after taking over from Masaaki Shirakawa. (Bloomberg)