TOKYO (Reuters) - Japan's economy rebounded in January-March from a lull in the previous quarter, shaking off the pain of a strong yen and Europe's debt crisis on solid consumer spending and rebuilding from last year's earthquake.
KEY POINTS:
- Gross domestic product (GDP) expanded 1.0 percent in January-March from the previous quarter after a revised 0.0 percent result for October-December last year. The increase compared with a median market forecast of a 0.9 percent rise.
- On an annualized basis, GDP rose 4.1 percent, bigger than a 3.5 percent increase expected by economists.
COMMENTARY:
TAKESHI MINAMI, CHIEF ECONOMIST, NORINCHUKIN RESEARCH INSTITUTE, TOKYO
"Growth was stronger than expected, helped by rebuilding from last year's earthquake. But the positive surprise is overshadowed by renewed debt problems in Europe and the increased possibility of a prolonged slowdown in China.
"The data does not change the outlook for the economy. Consumer spending is proving robust but the key to sustainability for the economic recovery is whether or not exports regain strength.
"There is a growing chance that advanced nations will once again cooperate to contain contagion from Europe's crisis, such as by jointly supplying money to the banking system."
YOSHIMASA MARUYAMA, CHIEF ECONOMIST, ITOCHU ECONOMIC RESEARCH INSTITUTE, TOKYO
"Consumer spending and public investment are what drove the economy, with auto demand stirred by government subsidies and investment helped by extra budgets after the earthquake. So, with government polices behind the quarterly growth, we can't say this is a reflection of real strength in the Japanese economy.
"Auto demand and public investment could stay relatively firm from April-June onwards, but growth in those areas will inevitably lose steam. When we think about the outlook for the Japanese economy, the key is whether exports will recover."
LINKS:
- For the full tables, go to the Cabinet Office's web site:
http://www.esri.cao.go.jp/en/sna/sokuhou/sokuhou_top.html
BACKGROUND:
- Japan's economy was weighed down in the final quarter of last year as a spike in the yen, slowing global growth and damage to supply chains from severe flooding in Thailand hit exports.
- Analysts expect the world's third-largest economy to achieve growth of around 2 percent in the current fiscal year ending in March 2013, mainly on solid private consumption and rebuilding efforts on its quake-battered northeast coast.
- The Bank of Japan loosened monetary policy in April, the second stimulus move in just over two months, in a show of its determination to beat deflation.
(Reporting by Leika Kihara, Rie Ishiguro and Kiyoshi Takenaka; Editing by Edmund Klamann)
