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Japan economy expands at fastest pace in a year in Jan-March
[TOKYO] Japan's economy expanded at the fastest pace in a year in the first quarter, government data showed on Thursday, heightening prospects of a steady recovery driven by robust global demand.
The data offers some relief to Bank of Japan policymakers, who are hoping that the economy gathers momentum enough to drive up wage growth and inflation, which remain low on soft household spending.
The world's third-largest economy grew an annualised 2.2 per cent in January-March, Cabinet Office data showed, exceeding a median market forecast for a 1.7 per cent rise and marking the fifth straight quarter of expansion.
It was the fastest pace of expansion since January-March last year and followed a revised 1.4 per cent rise in the October-December period.
Private consumption, which accounts for roughly 60 per cent of gross domestic product (GDP), increased 0.4 per cent in the first quarter, matching market forecasts and posting its fifth straight quarter of increases.
Capital expenditure gained 0.2 per cent in the first quarter, confounding market expectations for a 0.4 per cent fall.
Offshore demand, or exports minus imports, added 0.1 percentage point to growth, a sign that improvements in overseas economies underpinned Japan's recovery.
Japan's economy has shown signs of life with exports and factory output benefiting from a pick-up in overseas demand.
But consumer prices are barely rising as companies remain wary of increasing wages, keeping the BOJ under pressure to maintain its massive stimulus despite signs of strength in the economy.