Japan's Q1 growth revised up, to 1.9%

TOKYO • Japan's economy grew slightly more than the government initially reported for the first quarter, helped by a fractional revision in private consumption and business investment that dropped less than first thought.

Gross domestic product expanded by an annualised 1.9 per cent in the three months ended March 31, more than a preliminary reading of 1.7 per cent, according to revised data from the Cabinet Office released yesterday. The upward revision may be some relief to Prime Minister Shinzo Abe, who is struggling to revive the economy and has delayed an increase in the sales tax.

While GDP rebounded from a contraction in the final quarter of 2015, growth was bolstered in the three months through March by the leap year that provided an extra day of spending. A slowdown in overseas demand and the yen's strength remain risks for 2016.

"I still think the outlook for business investment is quite shaky," Mr Izumi Devalier, an economist for HSBC Securities Asia, said on Bloomberg TV. "Japanese companies are still dealing with a lot of uncertainty in the global outlook."

A separate government report showed Japan posted a 22nd consecutive monthly current account surplus. The excess in the widest measure of the nation's trade was 1.9 trillion yen (S$24 billion) in April, according to the Ministry of Finance.

The yen rose after the data yesterday and traded at 107.13 per US dollar in Tokyo. The currency has appreciated 12 per cent against the dollar this year.

Mr Abe said on June 1 that an increase in the nation's sales tax will be delayed until October 2019, a move intended to support struggling households ahead of an election this summer.

"There's no change to the picture that Japan's economy has plateaued and has no clear driver to boost momentum," said economist Koya Miyamae at SMBC Nikko Securities.

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A version of this article appeared in the print edition of The Straits Times on June 09, 2016, with the headline 'Japan's Q1 growth revised up, to 1.9%'. Print Edition | Subscribe