Japan first-quarter GDP revised up, boosted by leap year gain

Tue Jun 7, 2016 8:36pm EDT
 
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By Stanley White

TOKYO (Reuters) - Japan's economy grew faster than initially estimated in the first quarter as capital spending fell less than was first reported, but worries remain over slow consumer spending and weak exports.

"The upward revision is very slight, and when you exclude the impact of leap year growth is not that strong," said Shuji Tonouchi, senior fixed income strategist at Mitsubishi UFJ Morgan Stanley Securities.

"We expect growth to slow in the current quarter. The government should focus on steps to help low-income earners, but consumption may not rise much if consumer sentiment worsens."

Further gains in the yen could lower export profits and discourage companies from increasing investment and wages.

Prime Minister Shinzo Abe said he will announce additional economic measures this autumn, but economists worry his piecemeal approach to policy means that not enough money will be allocated to reversing population decline and speeding up growth.

Japan's economy expanded at an annualized 1.9 percent rate in the first quarter of this year, revised up from a preliminary reading of 1.7 percent growth, the Cabinet Office data showed.

The revised January-March GDP matched the median estimate in a Reuters poll of economists.

Compared to the previous quarter, GDP rose 0.5 percent, which was more than the preliminary reading of 0.4 percent growth and the same as the median estimate.   Continued...

 
A billboard advertising a car is seen in central Tokyo, Japan June 7, 2016.  REUTERS/Toru Hanai