Japan's Economy Grows Faster Than Expected

Japanese GDP expanded 0.5 per cent in the first quarter of this year, official data showed on Monday, in a better-than-expected result for the world's third-largest economy.

It was the second successive expansion for the Japanese economy after growth of 0.4 per cent in the fourth quarter of last year and defied gloomy expectations by analysts who predicted a small decline at the start of 2019.

The latest data was being closely watched amid speculation Prime Minister Shinzo Abe's government could postpone a planned sales tax hike for the third time if the GDP growth figure were very weak.

Net exports contributed strongly to the latest growth figures but only because the fall in imports outweighed a decline in exports, the Cabinet Office said.

Takeshi Minami, chief economist at Norinchukin Research Institute, said: "The headline figures were unexpectedly good but if you take a closer look, the data was not something we should be pleased about."

"Rather, the data clearly showed weak points in the economy with poor consumption and corporate investment on plants and equipments," he said.

Tokyo stocks opened higher on Monday after the news broke.

The benchmark Nikkei 225 index rose 0.74 per cent to 21,407 in early trade while the broader Topix index was up 0.52 per cent at 1,562. (AFP)