Tokyo: Japan`s economy expanded more than initially expected in January-March on solid growth in capital expenditure, underscoring the central bank`s view that a recovery from last year`s recession is gaining momentum.
The economy grew an annualised 3.9 percent in the first three months of this year, Cabinet Office data showed on Monday, more than a preliminary estimate of a 2.4 percent gain and exceeding a median estimate for 2.7 percent growth.
Capital spending rose 2.7 percent from the previous quarter, much more than a preliminary 0.4 percent increase and bigger than a 2.3 percent expansion projected in a Reuters poll.
The data is welcome news for the government and the Bank of Japan, which are hoping that expectations of a steady economic recovery will spur companies and households to boost spending.
A pick-up in capital expenditure is key for the success of premier Shinzo Abe`s stimulus policies, which aim to reflate the economy out of stagnation by changing companies` perception that deflation will persist.
On a quarter-on-quarter basis, the economy grew 1.0 percent in the first quarter, more than a preliminary reading of a 0.6 percent increase and a median estimate of a 0.7 percent growth.
