TOKYO: Japan’s economy grew more than expected in the third quarter as exports offset slack consumer spending, government data showed Monday, offering up some rare good news for Tokyo’s battered growth project.
The world’s third largest economy expanded 0.5 percent on-quarter between July and September, for an annualised 2.2 percent gain in Gross Domestic Product (GDP), the Cabinet Office said.
That handily beat market expectations for a 0.2 percent growth rate, or an annualised expansion of 0.8 percent.
Japan’s economy contracted in the last three months of 2015, before bouncing back in January-March with a 0.5 percent rise quarter-on-quarter and then a tepid 0.2 percent expansion in April-June.
The wobbly growth trend has put Japanese officials under pressure to deliver as economists increasingly write off Prime Minister Shinzo Abe’s bid to cement a lasting recovery, dubbed Abenomics.
His spend-for-growth policy boosted stock prices and pushed down the yen, helping Japanese exports.
But the yen, often bought as a safe haven in times of uncertainty, had been on the upswing since the start of the year, and got a big bump after Britain’s shock vote to exit the European Union.
It has recently weakened against on the dollar after billionaire businessman Donald Trump’s election as US president, offering up some good news for Abe’s administration.
On Monday, the Japanese currency was around four-month lows against the greenback, brightening the outlook for exporters in the coming months.
It bought 107.28 yen in Tokyo morning trading.
“3rd quarter GDP was a positive surprise, it should be a relief for Japanese policymakers,” said Kohei Iwahara, an economist at Natixis Japan Securities.
“However exports are making all the growth, mainly due to a pick-up in the Eurozone, so it could a one-off windfall.
“I would expect a slowdown in the 4th (quarter).”