-Martin Schulz, an economist at Fujitsu Research Institute
The world's third largest economy is heating up as the government has revised its growth numbers for the first quarter, helping Prime Minister Shinzo Abe to sustain confidence in his campaign to boost growth and defeat deflation. Japan's gross domestic product expanded an annualized 4.1%, compared with previous calculation of 3.5%, the Cabinet Office reporter Monday. In the meantime, nominal economic output, which is unadjusted for changes in prices, grew 0.6% from the previous quarter, while consumer confidence last month reached the highest level since 2007.
Since the last year's elections, the nation's policymakers have introduced bold measures aimed at reviving growth in Japan after years of stagnation. The BoJ has doubled its inflation target, aiming to reach 2% target in two years, and introduced a record stimulus programme, claiming its readiness to double the country's money supply, injecting trillions of Yen into the money market. So far, these measures have helped to depreciate the Japanese Yen versus the U.S. Dollar by almost 25%, boosting exports and making Japanese firms more competitive in overseas markets. Meanwhile, the upward revision in the growth figures helped lift investor morale, with the Nikkei index rocketing nearly 5%.
© Dukascopy Bank SA