Japan said yesterday that its economy raced ahead at a 5.5 percent annualized pace in the quarter to December, even faster than previously thought as companies increased investment in plant and equipment.
The expansion is the strongest in three years and marks an eighth straight positive quarter but analysts believe the heady pace is unlikely to be sustained this year.
Japan's current account surplus, meanwhile, widened by almost 50 percent in January from a year earlier, with strong exports helping to underpin the economy's recovery from a slump stretching back more than a decade.
Japan's GDP grew 1.3 percent in the three months to December over the previous quarter, up from an initial estimate of 1.2 percent and an annualized 4.8 percent, the Cabinet Office reported.
"The figures confirmed brisk growth in the quarter to December and now all eyes are on the current quarter to March," said Yoshiki Shinke, economist at Daiichi Life Research Institute.
The fourth-quarter performance was much stronger than the third's tepid expansion of just 0.1 percent quarter-on-quarter.
Private consumption growth in the world's second-largest economy was revised down to 1.0 percent from an initial 1.1 percent, but that was still much better than a 1.1 percent fall in the third quarter.
Consumer spending, which accounts for about 55 percent of Japan's economic activity, has lagged the wider recovery but appears to be holding up well so far this year after a soft patch in the middle of last year, analysts said.
"Despite sharp movements in global equity markets since the end of last month, we doubt domestic demand will fall into a deep slide," Morgan Stanley economist Takehiro Sato said.
Brisk spending on new plant and equipment also contributed to the faster economic growth. Capital spending growth was revised up to 3.1 percent quarter-on-quarter from 2.2 percent as manufacturers expanded production facilities to meet flourishing demand.
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