Japanese economic growth revised higher

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 on Wednesday. The median estimate of economists surveyed by Bloomberg was for a 1.9 per cent increase.

The upward revision may be some relief to Prime Minister Shinzo Abe, who is struggling to revive Japan's economy and decided to postpone 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," 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 that 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 ($17.7 billion) in April, according to the Ministry of Finance.The yen strengthened after the data and traded at 107.10 per dollar at 9:45 a.m. in Tokyo. The currency has appreciated 12 per cent against the dollar this year, hurting exporters while cutting import costs. Toyota Motor Corp. cited the currency last month when it said that annual net income will probably decline for the first time in five years.

Meanwhile, the stronger yen is reducing Japan’s bill for oil and gas purchased from overseas.

Bloomberg