Japan economy grew 0.6 per cent in second quarter

TOKYO: Japan’s economy grew 0.6 per cent in the second quarter, official data showed yesterday, marking the longest period of expansion in more than a decade for the world’s third-largest economy.

The latest figure was revised down from an initial estimate of 1.0 per cent but was still a strong performance from the Asian powerhouse economy, analysts said.

Japan’s economy has been picking up steam, mainly on the back of surging exports including smartphone parts and memory chips, with investments linked to the Tokyo 2020 Olympics also giving growth a boost.

Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute, said that strong growth was likely to continue, although concerns over North Korea would linger.

“Looking ahead – of course we have the North Korean issue which is hard to predict – but otherwise no urgent worries or risks so the economy will likely continue picking up,” he told AFP.

Marcel Thieliant from Capital Economic said there were “early indications” pointing to a possible slowdown in the third quarter.

“But the bigger picture is that the economy is experiencing one of the longest recoveries in recent history,” said Thieliant.

On a year-on-year basis, the economy grew by 2.5 per cent, driven by robust domestic demand and corporate investment, which offset a quarterly decline in exports.

The annualised growth rate was especially impressive given that Japan’s potential growth is said to be around one per cent or less, Shinke noted.

But corporate investment was much weaker than the preliminary figures, with the latest data showing 0.5 per cent growth, compared with a 2.4 per cent preliminary figure.