by Staff Writers
Tokyo (AFP) June 10, 2013
Japan's economy grew faster than previously thought in the first quarter, offering renewed hope for Prime Minister Shinzo Abe's growth-boosting plan after two weeks of stock market tumbles.
Japan's Nikkei 225 index had soared about 80 percent in the months since Abe campaigned for the nation's top job in November, pledging to drag the world's third-largest economy out of years of growth-sapping deflation.
But the Tokyo bourse stumbled in recent weeks, plunging about 18 percent to near bear market territory as doubts emerged over the premier's policy prescription of big government spending and aggressive central bank easing.
Markets were unimpressed with the so-called "third arrow" of his sweeping fix for the economy -- structural reforms -- which Abe unveiled last week as part of a blueprint dubbed "Abenomics".
But the 58-year-old leader vowed to press on before mid-term elections next month that are likely to solidify his Liberal Democratic Party's legislative power.
"The upward revision (for economic growth) confirmed that the Japanese economy remains on a firm recovery track," said Hideki Matsumura, senior economist with the Japan Research Institute.
Earlier Monday, the Cabinet Office said revised data showed annualised growth came in at 4.1 percent in January-March, up from a preliminary reading of 3.5 percent and well ahead of many other industrialised nations who are struggling to stoke their economies.
The annualised figures, which show the level of growth if quarterly data were stretched over an entire year, comes as economists sift through recent figures for signs that Abenomics is taking hold.
The IMF has said it expects Japan's economy to grow 1.6 percent in 2013.
The Cabinet Office also said revised figures for real GDP showed Japan's economy grew 1.0 percent in the first three months of the year, slightly better than the preliminary 0.9 percent growth reading.
The improvement was partly due to an upward revision in capital spending, a key measure of confidence among the nation's producers.
In other upbeat data, consumer confidence improved in May over the previous month with the number of Japanese who expect prices to rise sitting at a near five-year high, as Tokyo works to reverse years of falling prices which have crimped private spending and business investment.
"We expect the economy will continue to grow for now but consumer spending may be dampened in the current quarter after a sizeable adjustment in the Nikkei index," Matsumura said, referring the recent drop in the Tokyo stock market.
However, the Nikkei bounced back back on Monday with a 4.94 percent jump, the biggest one-day boost since March 2011 when Japan was pounded by a quake-tsunami disaster and subsequent nuclear crisis.
Also Monday, official figures showed Japan posted a surplus on its current account for the third straight month in April, as the weaker yen helped boost the value of income from overseas investments.
Japan's surplus doubled year-on-year to 750 billion yen ($7.6 billion) in its current account, the broadest measure of trade with the rest of the world, helping offset a widening trade deficit.
Japan's import bills have soared in the wake of the Fukushima atomic crisis two years ago, which saw Tokyo turn to pricey fossil-fuel alternatives after switching off the disaster-struck country's nuclear reactors.
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