TOKYO: Japan’s economy expanded faster than previously thought in the first quarter, according to fresh data on Monday that was likely to boost support for Tokyo’s efforts at stoking growth.
The Cabinet Office said that revised data showed annualized growth came in at 4.1 percent in January to March, up from a preliminary reading of 3.5 percent and well ahead of many other industrialized nations that are struggling to stoke their economies.
The figures come days after Prime Minister Shinzo Abe unveiled his so-called “third arrow” of a sweeping plan for the economy, that includes big government spending and aggressive monetary easing by the Bank of Japan.
Since winning landslide December elections, the conservative premier has moved to revive the flaccid economy and end years of growth-sapping deflation with a scheme dubbed as “Abenomics.”
His huge program has sent the yen plunging around 20 percent since November, which has in turn sent shares in Tokyo soaring, as the weaker currency benefits Japanese exporters.
Markets were initially unimpressed by Abe’s announcement last week to put in place structural reforms to support growth, but he has vowed to press on before midterm 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.
The annualized 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 International Monetary Fund has said that it expects Japan’s economy to grow 1.6 percent in 2013. The Cabinet Office also said that revised figures for real gross domestic product showed that Japan’s economy grew 1 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 to a recent drop in the Tokyo stock market.
Also on Monday, official figures showed that 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.