Japan’s economy has presented a surprise to investors

Japan’s economy has presented a surprise to investors

Japan Abenomics : deflation economy came to an end

Growth of the Japanese economy in the I quarter substantially revised rise, according to data released on Monday. This indicates that, given the increase in the consumption tax economy is in better shape than it was predicted.

In the period from January to March, Japan’s economy grew by 1.6% compared with the previous three months, while the previously announced an increase of 1.5%. Upward adjustment is due to an increase in capital expenditures.

In terms of the annual rate of annual growth of 6.7% versus 5.9% previously announced, with the market expected to rise 5.6%.

“What really pleased by the results of I quarter is the growth kapraskhodov – said economist HSBC, specializing in Japan, Izumi Deval. – We knew that before the tax increase in consumption will spike. However, the main good news for the stock markets is the fact that business is optimistic about the domestic investment. “

Government raised the consumption tax rate to 8% from 5%, and a sharp jump in spending in anticipation of intensified economic growth.

Expected quite sharp pullback in the quarter, at about 5%, considering how strong were the data in the I quarter underscores Deval.

Analysts at Mizuho Corporate Bank note that the revision of GDP growth suggests the rise in investment demand.

Annual growth of 6.7% puts Japan ahead of many of its competitors from developed countries. The U.S. economy is in the I quarter decreased by 1% compared with the same period a year earlier, indicating that the impact of the harsh winter. Eurozone GDP rose by only 0.9%.