Japan's economy expanded more than the government initially reported in the first quarter after better-than-expected spending by companies. The world's second-largest economy grew at an annual 3.3 percent rate in the three months ended March 31, the Cabinet Office said in Tokyo today, faster than the 2.4 percent preliminary number.
``Capital expenditure figures have shown consistent growth and they are what have been leading the economy for a long, long time, backed by corporate earnings,'' said Graham Davis, director of the Economist Intelligence Unit in Tokyo. Business investment surged 13.6 percent to a record in the quarter from a year earlier, the Finance Ministry said last week. The release accounted for about 60 percent of the capital spending component of GDP.
``Capital spending is solid now and has room to grow,'' said Yoshiki Shinke, an economist at Dai-Ichi Life Research Institute in Tokyo. ``We've been seeing brighter data out of Japan recently so there's no reason to be pessimistic.'' The lowest borrowing costs in the industrialized world and sales and profits at record levels are encouraging companies to refurbish factories and add capacity, making it likely investment will help the economy avoid a slowdown even as exports cool. Net exports -- the difference between exports and imports -- added 0.5 percentage point to first-quarter growth, revised up from 0.4 percent, as imports rose less than initially reported.