Japan Revises Growth to Annual 4.1% in Boost for Abenomics

Japn's economy grew more than the government initially estimated in the first quarter, helping Prime Minister Shinzo Abe to sustain confidence in his campaign to defeat deflation.




Gross domestic product expanded an annualized 4.1 percent, compared with a preliminary calculation of 3.5 percent, the Cabinet Office said in Tokyo today. Nominal GDP, which is unadjusted for changes in prices, rose 0.6 percent from the previous three months, leaving the economy 7 percent smaller than in the same period in 1997. Consumer confidence in May was at its highest level since 2007, a Cabinet Office survey showed.

Weaker Currency


The yen was 0.8 percent weaker today at 98.37 per dollar as of 3:06 p.m. local time, down almost 17 percent in the past six months. Weakness in the currency boosted the April current-account surplus by increasing income from companies’ investment abroad, said Long Hanhua Wang, an economist at Royal Bank of Scotland Group Plc in Tokyo.



The first-quarter expansion compared with a 1.2 percent gain in the fourth quarter. Today’s data came as Kuroda chairs his fourth monetary-policy meeting after taking over from Masaaki Shirakawa.



The Bank of Japan is divided over whether to authorize a measure designed to quell bond-market volatility, with some officials concerned it would return the BOJ to a pattern of incremental steps that failed in the past, people familiar with the discussions said recently.



At issue is whether the board should give its financial markets department the power to double the maturity of loans it extends to banks to two years. An opposing view is that the step is a useful backup in case of a spike in fluctuations in the government bond market, the people said, asking not to be named because the talks are private.



Abe, meanwhile, said last week that August is the earliest that his government will present legislation for the growth strategy, which includes efforts to boost investment and curb regulations stifling business. Installed as prime minister after his Liberal Democratic Party won a landslide victory in the lower house of parliament in December, Abe faces a July election for the less powerful upper house.