Japan’s economy bounced back ahead of the Olympics, data shows

TOKYO - Japan rebounded faster than expected from its pandemic-driven slump in the run-up to the Tokyo Olympics.

Official figures show the world's third-largest economy grew at twice the rate forecast in April to June.

But analysts have warned growth will be modest this quarter after a state of emergency was reimposed to ease a spike in Covid-19 infections.

Meanwhile, new data also shows that the economic recovery of its larger neighbour, China, is losing steam.

Preliminary data show Japan's gross domestic product (GDP) grew by an annualised 1.3 percent in the second quarter of the year. That came after a 3.7 percent slump in the previous three months.

The latest figures were far better than the expected gain of 0.7 percent and came as spending by individuals and businesses bounced back from the initial impact of the coronavirus.

However, Japan's recovery remains much slower than has been seen in other advanced economies like the US, which recorded a 6.5 percent jump in GDP for the second quarter of the year.

Japan's relatively weak rebound highlights how the government has struggled to contain the pandemic.

"I have very mixed feelings about this GDP result," Economy Minister Yasutoshi Nishimura said after the data was released.

"Our priority is to prevent the spread of the virus. It's very bad for the economy for this situation to drag on," he added.

In 2020, Japan's economy shrank by more than 4.8 percent over the year, its first contraction in more than a decade.

The country's economy emerged from last year's initial blow from the pandemic thanks to robust exports, although the slow rollout of its vaccination programme and a series of state of emergency measures have hurt consumption.