Japan’s recovery grows

The Japanese economy powered forward by an upwardly revised 1% in the first quarter of the year, reflecting the impact of the Tokyo government’s reflationary drive.

The quarter-on-quarter expansion in the world’s third-largest economy translates into an annualised growth rate of 4.1%, according to the figures released by Japan’s cabinet office.

The news boosted the Nikkei 225 Average by just short of 5% overnight. The Japanese stock market is down by 13.5% from its peak last month but remains 27% higher than the beginning of the year.

The government of prime minister Shinzo Abe has embarked on an ambitious programme of fiscal and monetary stimulus designed to pull Japan out of two decades of stagnation. The upward revision to the 3.5% estimated annualised GDP growth in May was due to a smaller drag from the capital spending component of demand, which fell by 0.3% on the previous quarter, less than the 0.7% first recorded.

Japan’s exports grew by 3.8% against the final quarter of 2012, reflecting firmer global demand.