Mumbai: Japan''s economy grew twice as fast as
expected in the third quarter. Gross domestic product
(GDP) in the world''s second-largest economy grew at
an annualised two per cent in the three months ended
September 30, against the second quarter growth rate
of 1.5 per cent - revised upward from the earlier estimate
of one per cent.
news comes amidst speculation that the central bank
may raise interest rates next month to cool surging
Fukui, governor of the Bank of Japan, had said last
week that the central bank may have to act ``in advance''''
to prevent the lowest interest rates among major economies
from triggering excessive capital investment.
The news spurred gains in bond yields and the Japanese
currency. The yen rose to 117.58 per dollar in Tokyo
from 118.04 before the report. The yield on five-year
notes rose eight basis points, the most in more than
five months, to 1.24 per cent. The Nikkei 225 stock
average reported the biggest gain in five weeks as the
longest expansion since World War II increased profits
of Japanese corporates.
spending, which accounts for more than half of the economy,
fell 0.7 per cent, twice as much as the 0.3 per cent
drop expected, amid a spell of bad weather that kept
shoppers at home and as wages growth stalled. Some economists
expect the central bank to delay an interest rate increase
until January when it has more information on whether
the increase in business spending has spurred employment
and fed wages growth.
consumer confidence was at its best in October as unemployment
remained near an eight-year low, reports showed.
Bank of Japan will conclude its two-day policy meeting
on November 16, when it''s expected to leave rates at
0.25 per cent, according to a survey of economists.
The bank''s subsequent meeting will conclude on December
19, four days after the publication of its Tankan business
the end of the quarter, data from Japan and overseas
raised concern growth may ease. The US economy, Japan''s
biggest export market, slowed to a 1.6 per cent annual
rate in the third quarter, from 2.6 per cent in the
second. The quarter- on-quarter expansion in the euro
economy slowed more than forecast in the third quarter,
expanding 0.5 per cent from 0.9 per cent in the prior
three months, a report from the European Union''s statistics
Japan, machinery orders, an indicator of spending plans,
had their biggest drop on record in the third quarter
and bank lending slowed for a third month in October.
Yet, capital spending in the quarter surged 2.9 per
cent, more than three times the 0.9 per cent gain expected.
account surplus in foreign trade added 0.4 percentage
points to growth while inventories with companies in
the quarter contributed 0.3-percentage point to growth.
GDP figures are preliminary and revised figures for
the third quarter are expected to be released on December