The Japanese economy grew 0.9 percent in the January-March quarter from the preceding quarter, or at an annualized pace of 3.5 percent, in real terms, the Cabinet Office said in a preliminary report on May 16.
It was the second consecutive quarterly expansion. The pace of growth in the January-March period was much faster than in the October-December period, when the economy expanded 0.3 percent on a quarter-on-quarter basis, or at an annualized pace of 1.0 percent.
Growth in the Japanese economy, as measured by gross domestic product, was driven by stronger consumer spending and a sharp recovery in exports. The pace of GDP growth beat most analysts’ expectations.
Japan’s exports rose for the first time in four quarters in the January-March period, surging 3.8 percent on a quarter-on-quarter basis, led by brisk shipments to the United States.
Japan is now the world’s third-largest economy after the U.S. and China and is heavily dependent on exports for growth.
Consumer spending, which accounts for about 60 percent of Japan’s GDP, rose 0.9 percent in the January-March period from the preceding quarter. The quarter-on-quarter rate of increase quickened from 0.4 percent in the October-December period.
Corporate capital investment declined for the fifth straight quarter in the January-March period on a quarter-on-quarter basis, falling 0.7 percent. But the quarter-on-quarter pace of decline was slower than 1.5 percent in the October-December period.
Public investment continued to grow on a quarter-on-quarter basis, but the rate of increase significantly slowed to 0.8 percent in the January-March period from 2.8 percent in the October-December period.
In nominal terms, or before adjustment for price changes, the Japanese economy grew 0.4 percent in the January-March period on a quarter-on-quarter basis, or at an annualized pace of 1.5 percent, amid continued deflation.
The latest GDP figures reinforced the view that the Japanese economy hit bottom last autumn.
Akira Amari, the economic and fiscal policy minister, said in a statement, “The effects of an economic policy being pursued by Prime Minister Shinzo Abe’s government have begun to appear.”
Amari struck an optimistic tone about the future direction of the Japanese economy. In the context of an anticipated mild recovery in the global economy and thanks to the Abe government’s economic policy, “a sustainable economic recovery, led by private-sector demand, is expected to continue,” he said.
Amid strong expectations for the Abe government’s economic policy, dubbed “Abenomics,” the yen has weakened sharply against the U.S. dollar and other currencies, and the Japanese stock market has rallied recently.