The Japanese economy expanded at an annualised rate of 4% in the second quarter of 2017, according to official government data.
It’s the biggest increase since January-March 2015 and beat expectations of a 2.5% increase.
Japan’s economy grew 1% in the April-to-June period compared to the previous quarter.
The economy has expanded for six straight quarters. The last time Japan’s economy grew for six consecutive quarters was January-March 2005 through April-June 2006.
Consumer spending and capital expenditure both increased by much more than forecast.
Capital expenditure rose by 2.4 percent in April-June compared to the previous quarter and private consumption rose 0.9 percent – beating estimates of 1.2 percent growth and 0.5 percent growth respectively.
Consumer spending accounts for more than half of the country’s GDP.
Domestic demand was the biggest contributor to growth in the quarter, while net exports, or shipments less imports, subtracted 0.3 percentage point from GDP.
Shinke Yoshiki, chief economist at Dai-ichi Life Research Institute, was quoted by the BBC as saying that the figures were a “good result and tailwind for Abenomics.”
According to Bloomberg, Rob Carnell, chief economist for Asia at ING in Singapore, wrote in a research note:
“That makes Japan the fastest-growing economy in the G-7 this quarter by our reckoning and may restart the chatter about the BOJ’s eventual QQE exit strategy,”
“This was not one of those fluky one-offs that was caused by a surge in inventories that will be worked down in coming quarters, or one of those random spikes caused by exports and imports growing out of sync.”